The rupee appreciated by 15 paise to close at 76.15 (provisional) against the US dollar on Thursday amid a weak greenback overseas and a rally in domestic equities.
However, surging crude prices and persistent foreign fund outflows capped the gains, forex traders said.
At the interbank forex market, the rupee opened slightly higher at 76.28 against the greenback and moved in a range of 76.36 to 76.09.
It finally settled at 76.15, higher by 15 paise over its previous close of 76.30.
On the domestic equity market front, the BSE Sensex ended 874.18 points or 1.53 per cent higher at 57,911.68, while the broader NSE Nifty jumped 256.05 points or 1.49 per cent to 17,392.60.
Brent crude futures, the global oil benchmark, rose 1.02 per cent to $107.89 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.43 per cent to 99.98.
Foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth ₹3,009.26 crore, as per stock exchange data.