Mumbai, Mar 3 (PTI) The rupee declined by 14 paise to close at 75.94 against the US dollar on Thursday, pressured by surging crude oil prices amid intensifying conflict between Russia and Ukraine.
Persistent foreign capital outflows and subdued domestic equity markets also affected market sentiment, forex dealers said.
At the interbank foreign exchange market, the rupee opened strong at 75.76 against the American dollar but soon entered the negative territory as investors turned towards safe-haven assets. During the session, it swung between a high of 75.60 and a low of 75.98.
The local unit finally settled at 75.94 against the dollar, down 14 paise from the previous close.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.23 per cent higher at 97.63.
On the domestic equity market front, the 30-share BSE Sensex ended 366.22 points or 0.66 per cent lower at 55,102.68, while the broader NSE Nifty declined 107.90 points or 0.65 per cent to 16,498.05.
Global oil benchmark Brent crude futures surged 2.59 per cent to USD 115.85 per barrel.
Officials from Russia and Ukraine are likely to hold their second round of talks in Belarus on Thursday.
Foreign institutional investors continued their selling spree in Indian markets as they offloaded shares worth Rs 4,338.94 crore on a net basis on Wednesday, as per exchange data.
"Dollar remained in demand as crude oil sustained well above USD 110 a barrel along with broad based strength in dollar index. Market participants are looking for safety where they could, resulting gain in safe haven assets.
"Risk assets slumped as markets reacted to Federal Reserve's... rate reversal cycle. Powell said he is inclined to support a 25 bps hike this month," said Dilip Parmar- Research Analyst, HDFC Securities.
Development in Ukraine and movement of crude oil prices will be the main focus for forex markets, he added.
"In near term, bias for spot USD/INR remains bullish as long as it floats above 75 while on higher side, we could see resilience around 76.30," Parmar said.
