After gaining nearly 200 points yesterday, the 30-share Sensex today opened higher on strong Asian cues and soon after touched a high of 16,544.38, its highest in over two weeks.
However, a fresh weakness in rupee, which had gained over 80 paise against the dollar in the last three sessions, spooked investors and pulled the index down to close at a 2-week high of 16,416.84 - a gain of 21.74 points.
The domestic currency touched an intra-day low of 55.85 against the dollar and was last trading at 55.70-levels against its previous close of 55.18.
Brokers said the renewed weakness in rupee, which had touched a life-time low of 56.38 on May 24, made investors jittery that the economy may continue to battle against high deficits. Across the market, 1,421 stocks ended higher while nearly 1,300 stocks closed with losses.
In view of expiry in the derivatives segment on Thursday and March quarter GDP data later in the week, participants preferred to adopt a 'wait and watch' approach, brokers said.
The gains in Sensex were led by Wipro with 2.72 per cent gains, followed by Coal India (2.14 pc), Maruti (2.11 pc), TCS (1.39 pc) and ONGC (0.98 pc).
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On the other hand, ITC, Sterlite, and Bharti Airtel led the Sensex losers with up to 1.5 per cent losses.
A weak rupee helped BSE-IT index log the best performance amongst indices with a 1.2 per cent gain, followed by BSE-TECk (0.74 pc), BSE-Realty (0.62 pc) and BSE-PSU (0.49 pc).
The NSE 50-share Nifty also inched up by 4.45 points or 0.09 per cent to finish at 4,990.10 after touching 5,000-mark.
However, Asian stocks ended higher for the second day in a row after strong global trends and amid expectations for a policy stimulus in China. Key benchmark indices in China, Hong Kong, Japan, Singapore and South Korea gained up to 1.4 per cent. (MORE)