The rupee dived 17 paise to close at 71.24 against the US dollar on Wednesday amid a flare up of tensions between India and Pakistan.

Firming crude oil prices, month-end dollar demand from oil importers and a weak sentiment at domestic equity markets weighed on the rupee, analysts said.

At the Interbank Foreign Exchange (forex) market, the domestic unit opened almost flat at 71.08. It then shuttled between a low of 71.49 and a peak of 70.94, before finally ending at 71.24, showing a loss of 17 paise.

The domestic currency had ended 10 paise lower at 71.07 to the US dollar on Tuesday.

The rupee marked "second day of loss amid escalation of tension with Pakistan and month-end dollar demands from oil importers," V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities said.

The currency failed to take advantage of a weaker US dollar, he added.

Meanwhile, foreign investors (FIIs) remained net buyers in capital markets, putting in Rs 423 crore on a net basis Wednesday.

Brent crude futures, the global oil benchmark, climbed 1.17 per cent to $65.97 per barrel.

The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.07 per cent to 95.93 after the US Federal Reserve chief reiterated that policy makers will stay “patient”, and they are in “no rush to make a judgment” on future interest-rate moves.

The benchmark BSE Sensex surrendered early gains Wednesday to end in the negative terrain after a 600-point swing amid escalating cross-border tensions between India and Pakistan.