The rupee today fell sharply in trade and was just a whisker away from hitting the 72 mark for the very first time. The currency hit a low of 71.97, after having closed at 71.58 on Tuesday.

The fall in the currency has largely to do with weakness in emerging market currencies, after an economic crisis in Argentina. Further, consistent rise in the crude oil prices and dollar index has kept sentiments bearish. Analysts believe that the rupee would fall to the 73 levels.

The Sensex and the Nifty too reacted to the sharp plunge in the rupee, with the Sensex dropping by 300 points, breaching the 38,000 points mark, while the Nifty was lower by 100 points.

Interestingly, all the 19 sector gauges compiled by the BSE were trading lower led by the S&P BSE Consumer Durables index's 2.5 percent drop. The broader markets also saw a collapse with the Mid- and small-cap shares faring even worse, with the S&P BSE MidCap index falling 1.5 percent and the S&P BSE SmallCap index down almost similarly.

The Sensex is down almost 1,000 points from levels of 38,925 points hit a few days ago. Sentiments for the rupee will largely determine the direction of the markets in the coming days.