(Read: Rupee Falls To Fresh 3-Month Low Against US Dollar Today, Nears 65/USD)
Public sector banks finally saw some buying today with the sectoral index of Nifty PSU Bank ending 0.83 per cent higher, snapping six sessions of losing streak. But overall market sentiment continues to remain weak, say analysts.
"There has been a sense of negativity among market participants (after the fraud) and this has shattered the confidence for PSU banks," said Saurabh Jain, assistant vice president of research at SMC Global Securities
Traders attributed higher demand for the US dollar from importers and banks and broad strength of the greenback for the rupee's decline today. Weakness in domestic stocks is weighing on the rupee, forex advisory firm IFA Global said in a note.
The sentiment in banking stocks is also negative owing to developments around PNB scam and rising rates, it added. On a net basis, foreign investors withdrew Rs 895.79 crore from stock markets yesterday, according to a provisional data.