The Bombay Stock Exchange Sensex, which plunged by more than 600 points in early trade on Monday following the Bharatiya Janata Party's loss in the Bihar elections, recovered some ground to settle 144 points down at 26,121. The rupee also fell by 68 paise to close at a nearly eight-week low at 66.44 against the dollar following a persistent demand of the American currency from banks and importers amidst a sharp fall in the equity market, reported the Press Trust of India.

Earlier, stocks fell amid fears that opposition parties would now block business reforms that are part of the BJP’s agenda. The slump could follow a phase of recovery and consolidation over the week, which will be cut short by holidays for Diwali. Traders said other factors could affect the markets more than Bihar, especially the likelihood of an interest rate cut by the United States next month, and the Indian government’s ability to continue its drive to ease business, Hindustan Times reported.