On the eve of Narendra Modi-led government’s maiden Union budget, the rupee on Wednesday rose for the second day and ended three paise higher at 59.75 against the dollar on sustained selling of the US currency by exporters and some capital inflows.

However, weak trend in local equities and a firm US dollar overseas capped the rupee rise, a forex dealer said.

At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed lower at 59.92 a dollar from last close of 59.78. It eased further to 59.93 due to initial dollar demand from importers and drop in local equities.

Later, it bounced back to a high of 59.67 on dollar selling by exporters and some banks before settling at 59.75, a rise of three paise or 0.05 per cent.

Yesterday, it had gained 23 paise or 0.38 per cent.

After plunging by 517.97 points or 1.98 per cent on Tuesday, the Indian benchmark S&P BSE Sensex on Wednesday dropped further by 137.30 points or 0.54 per cent on concerns highlighted by the Economic Survey and reducing expectations from the Union Budget on Thursday.

FIIs had bought shares worth Rs 422.72 crore on Tuesday.

The dollar index, a gauge of six major global rivals, was up 0.04 per cent.

Pramit Brahmbhatt, Veracity Group CEO said: “Rupee ended slightly better for the day. Rupee appreciated as dollar selling from foreign banks helped it recover its early losses but weak local equities which closed half a per cent down weighed. The trading range for the spot USD/INR pair is expected to be within 59.30 to 60.30.”

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