In response to lower trade deficit figures for the month of January, the rupee recovered the majority of its initial losses to conclude Wednesday's trading session down 4 paise at 82.82 against the US dollar.
Forex traders claimed that the appreciating bias was curbed by a stronger American dollar in foreign exchange markets.
The rupee opened lower at 82.90 to the dollar on the interbank foreign currency market amid early losses in local markets.
Later in the day, the local unit gained some ground in line with equities and closed at 82.82, down 4 paise from its previous closing of 82.78.
The native currency experienced an intraday top of 82.79 and a low of 82.90 against the US dollar during the day.
India's trade deficit in January fell to a 12-month low of USD 17.75 billion as imports declined by 3.63 per cent year-on-year to USD 50.66 billion.
Exports in January dipped by 6.58 per cent to USD 32.91 billion, as against USD 35.23 billion a year ago.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.21 per cent higher at 103.45.
Brent crude futures fell 1.22 percent to USD 84.54 per barrel, the global oil benchmark.
The broad NSE Nifty increased 86.00 points or 0.48 percent to 18,015.85 while the 30-share BSE Sensex finished 242.83 points or 0.40 percent higher at 61,275.09.
According to exchange data, foreign institutional investors (FIIs) were net purchasers on Tuesday in the capital markets, buying shares worth Rs 1,305.30 crore.
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