The Indian rupee closed weaker on Wednesday, after it failed to hold on to early gains as the local stock market slid nearly 2 percent amid worries about waning foreign investor interest. The rupee ended at 43.8150/8350 per dollar, 0.06 percent weaker than Tuesday's 43.80/81, after rising to a session high of 43.68. In overseas trade, the dollar floundered against the yen and most other regional currencies after the European Central Bank's chief economist urged Asia to bear their share of the greenback's weakness.
The single currency on the other hand slipped slightly. In European trade, the euro was at $1.3096/99, while the dollar fetched 103.31/34 Japanese yen.
Traders said the falling Indian shares were dragging the rupee down, with concerns about a rise in global crude prices also weighing on the currency. Oil is India's biggest import.
The benchmark Bombay stocks index extended losses into a third straight day and ended at its lowest close in seven weeks. Rupee premiums on forward dollars ended higher as importers stepped up their hedging amid nervousness about the near-term outlook for dollar supplies.