The rupee surged 29 paise to close at 74.42 (provisional) against the U.S. dollar on Thursday following year-end dollar selling by banks and exporters amid muted domestic equities.
At the interbank forex market, the local unit opened strong at 74.56 against the greenback and witnessed an intra-day high of 74.38 and a low of 74.65. It finally settled at 74.42, a rise of 29 paise.
In the previous session, the rupee had settled just one paisa lower at 74.71 against the U.S. dollar.
"Rupee, after Wednesday’s pause, started heading north to monthly high on expectation of better inflows going ahead and dollar selling from exporters on year-end. Central bank’s remain aside from intervening and technical selling has been seen accelerated in USD-INR on breaking of support 74.50," said Dilip Parmar- Research Analyst, HDFC Securities.
On the domestic equity market front, the BSE Sensex ended 12.17 points or 0.02 % lower at 57,794.32, while the broader NSE Nifty declined 9.65 points or 0.06 % to 17,203.95.
Meanwhile, the dollar index, which measures the greenback's strength against the basket of six currencies, rose 0.26 % to 96.18.
Brent crude futures, the global oil benchmark, fell 0.68 % to $ 78.69 per barrel.
Foreign institutional investors were net sellers in the capital market on Wednesday, as they offloaded shares worth ₹ 975.23 crore, as per exchange data.
