FII selling is a combination of ETF redemptions, the unwinding of leveraged positions, and algo-trading. But, most of the markets across the world are behaving in the same fashion, says Sundaram of o3 Capital.
Much will depend on what happens in the equity markets. Yesterday saw FII selling as well and if there is a follow through of the nature we saw on Monday, then 63/USD could be taken pretty easily.
"For the past few days, the market has been reacting with a fear after listening to RBI governor I would say it is positioning itself with a view of no rate cut now," Manish Wadhawan of HSBC told CNBC-TV18.
CNBC-TV18's Gopika Gopakumar reports that the banking stocks were singly responsible for the bloodbath on the D-Street today. The banking index, Bankex, accounts for over 25% of the Nifty, and it falling a dramatic 3.5% today, dragged the markets down over 2%.