However, gold rose for the third day by adding Rs 70 to Rs 30,570 per ten gram in the national capital.
The week began on a sour note for most investors in India as the equity benchmark BSE Sensex fell for the second day and ended at a three-week low of 20,707.45. The 426-point plunge was the worst singe-day drop in five months.
The Indian rupee ended lower for the sixth session in seven as it dived 44 paise to end at 63.10. This was the first time in 10 weeks that the currency slipped below the 63-mark.
In an encore of Friday's poor show when Sensex dropped by 240 points and rupee depreciated by 73 paise, today's fall in Indian rupee and stocks was attributed to a rout in emerging markets.
Reports of Argentina abandoning support to its peso on the open market is also said to have affected sentiments.
"The currency sell-off is causing a contagion effect as investors pulled money from emerging markets and other assets viewed as risky," said Sugandha Sachdeva, an assistant vice president at Religare Securities.
In addition to the sell-off, rising fears of the US Federal Reserve tapering its monthly bond-buying programme by another USD 10 billion, also made investors jittery.
Domestic fund managers are already wary of tomorrow's RBI policy meeting after Governor Raghuram Rajan described inflation as a destructive disease and a panel recommended making retail inflation a priority.
"...there is an anticipation in the market that RBI will keep its interest rates high in spite of some corrections seen in the inflation numbers," said Jignesh Chaudhary, Head of Research, Veracity Broking Services.
The Finance Ministry sought to assure investors that the country's fundamentals are very strong.
"Current Account Deficit (CAD) is below USD 50 billion. Foreign exchange reserves are (at) all-time high. We have very strong fundamentals...I don't think that there is any cause of worry," Economic Affairs Secretary Arvind Mayaram said in Delhi.