The rupee started the session on a flat note against the US dollar on Thursday amid strong American currency in the overseas market and a firm trend in the domestic equities.
Besides, unabated foreign fund outflows and fluctuations in international crude prices weighed on investor sentiments, forex traders said.
At the interbank foreign exchange, the rupee opened slightly strong at 76.28 against the US dollar but soon shed the gains to quote at 76.31, registering a fall of just 1 paisa over the last close.
In the previous session, the rupee rose 20 paise to close at 76.30 against the US dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, surged 0.14 per cent to 100.56.
On the domestic equity market front, the 30-share Sensex was trading 381.36 points or 0.67 per cent higher at 57,418.86 points while the broader NSE Nifty advanced 106 points or 0.62 per cent to 17,242.55 points.
Global oil benchmark Brent crude futures rose 1.23 per cent to $108.11 per barrel.
Foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 3,009.26 crore, as per stock exchange data.
(With inputs from PTI)