A depreciating rupee that touched its lowest level in 32 months to close at Rs 52.15 to a dollar - just 5 paise away from its all-time low recorded in March 2009 - dragged down the Bombay Stock Exchange (BSE) Sensex by 425 points or 2.6%, to close below the 16,000 mark, the second time in less than seven weeks.
The rupee has fallen by 15% in the past three months, hurting those who send their children abroad to study or take a vacation on foreign shores.
And while this fall will hurt India's huge oil import bill - the main reason why companies raised petrol prices on November 9 - those remitting money stand to gain.
It seems the stock market and currency markets are feeding one another in this downward dive.
While currency market traders say lack of foreign inflows and exit of foreign institutional investors (FIIs) led to the rupee's decline - in the past two months, FIIs withdrew Rs 9,768 crore ($2 billion) from the market - stock market traders claim that a falling rupee has reduced the returns that investors could have got from the stock markets and are thus exiting India.
Both are looking at the government for succour.
"Most people are waiting for some policy intervention that could trigger some upward movement in the rupee - for instance FDI in retail or aviation sectors," a foreign currency trader said.
The Sensex that closed at 15,946 also fell because of tensions in global markets that were reacting to a potential lowering of credit rating of France, one of the larger and stronger economies that along with Germany is expected to fix the Eurozone crisis.
"There is a possibility of another 5-6% depreciation before the rupee stabilises," said Nirmal Jain, managing director, India Infoline.
"The sentiment is certainly bearish and I would advise investors to wait for sometime before investing. There also needs to be greater clarity on events from the US and Europe."
Companies are bracing themselves to bear the brunt of the depreciating rupee.
Tata Motors, for instance, had a valuation impact on repayment liability of Rs 300 crore in the second quarter due to rupee depreciation from Rs 45 to Rs 49, according to its CFO, C Ramakrishnan.