The rupee surged by 31 paise to close at 70.03 against the US dollar Thursday amid a sharp rebound in the domestic equity markets, even as oil prices firmed up.

This is the third straight session of gain for the domestic currency, during which it has strengthened by 48 paise.

At the interbank foreign exchange market, the rupee opened at 70.26 per dollar and advanced to a high of 69.99 during the day. It finally settled at 70.03, up 31 paise against its previous close of 70.34.

Persistent foreign fund outflows and rising crude oil prices capped the gains for the rupee, forex dealers said.

Globally, stocks markets wobbled and the Japanese yen rose after the US slapped sanctions on Chinese telecom major Huawei, escalating its trade conflict with China.

“Indian rupee strengthened for third session against US dollar. Even after surge in crude oil prices and foreign fund outflow in equity cash segment, rupee manages to gain,” said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.

Sharma further said all eyes are now on the upcoming exit polls scheduled on May 19. “Huge volatility is expected in domestic currency between May 20 and 23,” he added.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 953.23 crore Thursday, as per provisional data.

Brent crude futures, the global oil benchmark, rose 1.21 per cent to USD 72.64 per barrel amid heightened geopolitical tensions in the Middle East.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, inched up 0.03 per cent to 97.59.

Domestic benchmark indices finished with smart gains Thursday as investors accumulated stocks after the recent spell of weakness. The BSE Sensex finished at 37,393.48, up by 278.60 points, or 0.75 per cent, while the broader NSE Nifty rose 100.10 points, or 0.90 per cent, to 11,257.10.

Meanwhile, the Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.2087 and for rupee/euro at 78.6880. The reference rate for rupee/British pound was fixed at 90.6319 and for rupee/100 Japanese yen at 64.01.