Strong month-end demand for the US currency mainly from oil importers along with currency futures expiry related purchases predominantly weighed heavily on the forex market and haunted investor sentiment.
The euro climbed 1.3 percent against the yen to 135.60 and added 0.7 percent against the dollar to trade at $1.1115.
The rupee is trading weak against the dollar in afternoon trade.
Both crude benchmarks are now down around 20 per cent since their last peak in June
The rupee had shed 10 paise to close at 66.14.
Among the Sensex losers, Yes Bank tumbled 5.46 per cent, followed by Bajaj Finance 5.40, ICICI Bank 3.82 per cent, IndusInd Bank 3.10 per cent and HeromotoCorp 2.55 per cent.
In the currency markets, the rupee lost another 10 paise to close at 1-week low of 63.54 against the US dollar
Traders said falling crude prices in the global market was a big boost for the economy as it lightens the country's import bill burden, eases inflation and current account deficit concerns.
Petroleum Minister Ram Naik hinted on Wednesday that fuel prices may come down further if the international crude prices of Brent fall to around $20-22 per barrel.\n\n\n\n
Rupee rebounds from one-week low, up 9 paise against dollar.
Maruti Suzuki was the biggest gainer among Sensex scrips, rising 5.89 per cent, followed by M&M up 5.29 per cent.
Barring oil and gas, all BSE sectoral indices finished in the green.
Kotak Mahindra Bank was the biggest gainer on both the indices, ending nearly 9 per cent higher following reports that Warren Buffett's Berkshire Hathaway Inc was planning to pick up stake in the private sector lender.
Top gainers include Yes Bank, HUL, Vedanta, NTPC, Bharti Airtel, Adani Ports, PowerGrid and Tata Motors, rising up to 5 per cent.
The rupee had gained five paise to close at 63.25 against the dollar in on Monday's trade on fresh selling of the US currency by exporters amid bullish stocks.
The rupee had jumped by 164 paise or 2.39 per cent in previous six trading days.
Good foreign capital inflows failed to restrict the rupee's fall against the dollar
The rupee slumped to 64-level against the American currency, its second straight fall this week.
The rally is being fuelled by across-the-board buying.
It moved in a range of 63.54 and 63.81 per dollar during the day.
The Natural History Museum's annual competition and exhibition, Wildlife Photographer of the Year has been the longest-running and most prestigious nature and wildlife photography competition that has been recognising the world's best nature photography every year since 1965.
As of now, the custom duty on gold is 10 per cent.
There was fresh dollar demand from banks and importers.
The NSE 50-share index, after moving between 10,469.90 and 10,395.25, finally concluded at 10,458.65, up 41.50 points
The oil crisis could not have come at a worse time for the Modi government as its tax collection has fallen short of its 2020-2021 target by Rs 5.2 lakh crore.
One of India's main export destinations, the euro zone, is struggling to revive its economy and battling disinflation.
Sensex heavyweight Reliance Industries fell 2.76 per cent. In percentage terms, major laggards were Yes Bank, Indusind Bank, RIL, ICICI Bank, HDFC and Axis Bank -- plunging as much as 6.62 per cent.
This means lower losses on fuel sales by Indian oil companies and a shrinking oil subsidy bill for the government.
The Union government will gain close to Rs 1.6 lakh crore in additional revenues this fiscal from a record hike in excise duty on petrol and diesel that has pushed the total incidence of taxation on auto fuels to 70 per cent of the price. Late on Tuesday evening, the government hiked excise duty on petrol by Rs 10 per litre and that on diesel by Rs 13 a litre to mop up gains arising from international oil prices falling to a two-decade low.
In the Sensex pack, M&M was the biggest loser, tumbling by 6.66 per cent, followed by TCS dropping 4.14 per cent.
A weakening dollar against other currencies overseas supported the rupee.
The fall in international oil prices had resulted in six consecutive reduction in petrol prices since August and two in diesel in the last one month and there was possibility of another round of cuts this weekend.
Most of the 30-Sensex constituents led by M&M, Adani Ports, BhartiAirtel, Bajaj Auto, Hero MotoCorp, ICICI Bank, Sun Pharma, Cipla, HDFC Ltd, ONGC and Hind Unilever were trading in negative terrain, falling by up to 5.77 per cent.
The Indian rupee resumed sharply lower at 66.65 per dollar against last Friday's level of 66.48.
US brokerage Bank of America-Merrill Lynch on Tuesday said its sees the first rate cut this fiscal only in March next as inflation is expected to fall only by December end on a decline in commodity prices driven by the US Fed tapering.
Ongoing trade-war rhetoric between the US and China added some nervousness on the trading front coupled with extremely bullish dollar sentiment overseas.
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Rupee rebounds 26 paise against dollar; snaps 2-day losses
Weak equity markets too hit rupee sentiment
The fall in crude prices has added to the gains.
