Amid dollar firming up in the overseas markets, the Indian rupee on Thursday lost 12 paise against the US currency after recording significant gains in early trade in tune with stock markets.
Dealers in foreign exchange said increased portfolio inflows boosted the rupee sentiment in early stages. Foreign institutional investors had pumped in $456.80 million on September 7 and 8, according to provisional data.
In fairly active trade at the Interbank Foreign Exchange (Forex) market, the local currency closed lower by 12 paise at 48.63/64 a dollar.
The rupee had resumed strong at 48.41/42 per dollar from Wednesday's close of 48.51/52 a dollar. Later, it improved to a high of 48.29 due to firm local equity markets in morning trade as the benchmark Sensex was up by over 251 points.
However, a late sell-off in equities pushed the Sensex to close up by a mere 33.31 points, putting pressure on the rupee to touch a low of 48.66 a dollar.
The US currency recovering from its lowest in almost a year also weighed on the rupee, dealers said.
Global crude oil prices were trading near $72 a barrel in London today.