Indian rupee erased the intraday losses and ended at day's high at 72.91 per dollar, amid buying seen in the domestic equity market.
It opened 8 paise lower at 73.16 per dollar against previous close of 73.08 and traded in the range of 72.90-73.18.
At close, the Sensex was up 382.95 points or 0.74% at 52232.43, and the Nifty was up 114.20 points or 0.73% at 15690.40.
"Rupee traded weak towards 73.20 from 72.85, in the first half of day, the manufacturing index in the US provided crude positive trend which kept rupee on a weak note. Going ahead the rupee can be in range of 72.75-73.25," said Jateen Trivedi, Senior Research Analyst at LKP Securities.
The US dollar was wavering above major support levels on Thursday, as traders awaited a batch of US economic data that could set the tone at central bank meetings later this month.