Indian rupee hits 8-month low as virus cases skyrocket

India's rupee on Monday plunged below 75 against the US dollar for the first time in eight months amid a rapid increase in second-wave of coronavirus cases, while concerns over rising US bond yields hurt broader emerging Asian markets.

Weighing on the region's markets were expectations of a further rise in US yields on a likely strong reading for US consumer inflation for March, on the heels of a more-than-expected rise in US producer prices.

The rupee weakened as much as 0.5% to 75.138, its lowest since August last year, before recovering to 74.870, as record cases and a possible lockdown in the western state of Maharashtra, home to Mumbai, hurt sentiment.

"Growth differential between the United States and India, which is driven by improving performance in the US and deteriorating COVID-19 situation and inflation in India, is leading the rupee lower," Arnob Biswas, FX research head at SMC Global Securities said.

Shares in Mumbai tanked as much as 3.7%, marking their worst session in more than six weeks.

In Singapore, stocks declined for the fifth straight session ahead of the central bank's monetary policy decision on Wednesday.

The Monetary Authority of Singapore (MAS) is seen keeping its exchange-rate based policy settings unchanged, a Reuters poll showed, while a separate poll determined the trade-reliant economy is expected to contract slightly in the first quarter.

Prakash Sakpal, an analyst at Dutch bank ING, was more bullish in his view of Singapore's economy.

"We expect Singapore to be among the first few Asian economies reporting positive GDP growth in 1Q, albeit mildly positive," he said, adding that an electronics-led export surge was leading the city-state out of last year's record slump.

South Korea's won weakened 0.5% and Indonesia's rupiah, which backs some of the highest-yielding debt in emerging markets, fell to its lowest level since Nov. 3.

Equities in Malaysia lost up to more than half a percent, while shares in Thailand, which reported its biggest daily jump in new COVID-19 cases for a second day in a row, declined as much as 1.5%.

Through the week, first-quarter economic performance of China, Asia's growth powerhouse, as well as corporate earnings in the United States will also be in focus.