The rupee pared its initial gains and depreciated 9 paise to settle at 73.58 (provisional) against the US dollar on Wednesday, as heavy selling in domestic equities weighed on investor sentiment.

At the interbank forex market, the domestic unit witnessed a highly volatile trading session. It opened at 73.39, pared the gains and finally closed at 73.58 against the greenback, registering a decline of 9 paise over its previous close of 73.49.

During the session, the local unit saw an intra-day high of 73.36 and a low of 73.62 against the American currency.

"Market sentiments are hinged on to the US fiscal stimulus negotiations. There is a potential for a stimulus bill but at the same time there is a lot of caution on the back of it," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.

Gupta further said that "the election event volatility is yet to begin and the USD-INR spot is respecting the strong support of 73. Until it trades above that, prices will remain in between 73-73.60".

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.34 per cent down at 92.74.

On the domestic equity market front, the BSE benchmark Sensex was trading 339.45 points lower at 40,204.92, and the broader NSE Nifty fell 106.80 points to 11,790.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,585.07 crore on Tuesday, according to exchange data.

Brent crude futures, the global oil benchmark, fell 1.44 per cent to USD 42.54 per barrel.