The rupee appreciated further by 3 paise to close at 74.19 against the US dollar on Tuesday following a strong rally in the domestic equity markets.
However, a strong dollar in the overseas markets and rising crude prices weighed on the investor sentiment and capped gains, forex traders said.At the interbank forex market, the local unit opened strong at 74.12 against the greenback and moved in a range of 74.11 to 74.20 in the day trade.
It finally ended at 74.19 against the American currency, registering a rise of 3 paise over its previous close of 74.22. The rupee had gained 17 paise on Monday.
Equity benchmark indices Sensex and Nifty surged to fresh lifetime highs on heavy buying in banking, finance and metal stocks amid supportive global cues on Tuesday. Sensex ended 403.19 points or 0.73 per cent higher at 55,958.98, while Nifty advanced 128.15 points or 0.78 per cent to 16,624.60.