The rupee dropped by 82 paise to hit 74.50 against the dollar in early trade on Thursday, amid sharp losses in global markets after the US imposed a temporary ban on travel from Europe to fight the coronavirus pandemic. Domestic stock markets nosedived to a 30-month low as the benchmark index Nifty 50 slid below the 10,000 mark tracking global markets. Those losses came after the World Health Organization (WHO) late on Wednedsay declared the new coronavirus (COVID-19) a pandemic, and expressed deep concern over the "alarming levels of inaction".
Forex traders said market participants turned jittery amid mounting fears of a coronavirus-led economic slowdown.
The rupee had settled at 73.68 against the US dollar on Wednesday.
Though weakening of the US dollar overseas and easing crude oil prices supported the rupee, traders believe there are mounting fears of recession in major economies due to the coronavirus outbreak.
This could weigh on the rupee, they said.
Following the announcement, US President Donald Trump suspended all travel from Europe, excluding the UK, to the US for the next 30 days to stop the spread of the virus.
Brent crude futures, the global oil benchmark, fell 5.53 per cent to USD 33.81 per barrel.
Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they sold shares worth Rs 3,515.38 crore on Wednesday, as per provisional data.
Domestic bourses opened on a negative note with benchmark index Sensex trading 1,672.61 points down at 34,009.81 and the broader Nifty plunging 469.50 points to 9,988.90.
The dollar index, which gauges the greenback''s strength against a basket of six currencies, fell by 0.27 per cent to 96.24.
The 10-year government bond yield was at 6.19 per cent in morning trade.
COVID-19, that first originated in the Chinese city of Wuhan in December last year, has claimed over 4,200 lives and infected more than 117,330 people across 107 countries and territories.