On Wednesday, the rupee recovered early losses and closed nearly unchanged at 76.55 against the US dollar, owing to anticipation of increased dollar inflows.

Forex traders claimed the local currency was pulled down by a lacklustre trend in domestic equities and the strength of the greenback in the international market. The local currency began at 76.69 against the US dollar on the interbank forex market, with an intraday high of 76.50. It eventually closed at 76.55, up just 1 paisa from its previous close of 76.56.

Concerns over capital outflows from emerging markets, including India, have risen as a result of the US Federal Reserve's shift to a more aggressive rate tightening policy, putting additional pressure on the rupee against the US dollar.

The dollar index, which measures the strength of the greenback against a basket of six currencies, was up 0.27 percent at 102.58. In the last four months, foreign institutional investors have pulled USD17.5 billion out of domestic shares and debt. Meanwhile, Brent crude prices rose 0.62 percent to USD105.64 a barrel, the global benchmark.

The 30-share BSE Sensex slid 537.22 points, or 0.94 percent, to 56,819.39 points, while the wider NSE Nifty fell 162.40 points, or 0.94 percent, to 17,038.40 points.  According to stock exchange data, foreign institutional investors were net sellers in the capital market on Tuesday, offloading shares worth Rs1,174.05 crore.

Market closing: Sensex falls 537-pts, Nifty closes above 17000

Tesla loses USD 125 bn in market value as Elon Musk acquires Twitter

Reliance becomes first Indian firm to hit Rs 19 lakh cr M-CAP