The rupee slumped below the psychologically important 96 mark to close at 96.31 against the US dollar on Thursday, its lowest level in over two months.

The currency lost 37 paise after opening at 95.95 and touching an intraday low of 96.34, as foreign investors sold heavily amid rising global bond yields and risk aversion. FIIs offloaded equities worth Rs 10,148.41 crore on a net basis on Wednesday, according to exchange data.

“A strong dollar and surge in global crude oil prices may further pressurise the rupee,” said Anuj Choudhary, research analyst at Mirae Asset Sharekhan. Uncertainty over the US-Iran conflict also weighed on the currency.

The Sensex dropped 570.59 points to 71,909.70 and the Nifty fell 198.50 points to 22,421.95. Markets are closed Friday for Gandhi Jayanti and reopen Monday.

Analysts expect the rupee to trade with a negative bias amid risk aversion and worries over rising global treasury yields. The dollar index stood at 101.90, up 0.45 per cent. RBI intervention may support the rupee at lower levels, traders said. With markets shut Friday for Gandhi Jayanti, GIFT Nifty futures around 22,555 indicated underlying caution ahead of Monday’s reopening.