The Indian rupee dropped against the U.S. dollar in morning deals on Tuesday, as regional stocks fell after North Korea fired another missile into the Sea of Japan, sparking further tensions with the West.

The benchmark BSE Sensex was down nearly 254 points or 0.80 percent at 31,497 while the broader Nifty index was down 77 points or 0.78 percent at 9,836.

The rupee fell to a 4-day low of 64.01 against the greenback, compared to Monday's closing value of 63.80. If the rupee falls further, 65.00 is possibly seen as its next support level.

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