The rupee depreciated 10 paise to hit a new all-time low of 85.25 against the US dollar in early trade on Thursday, dragged down by the unabated outflow of foreign capital amid increased month-end demand of the American currency.

Positive sentiment in domestic equity markets failed to support the Indian currency as the greenback index remained elevated while crude oil prices were on upward move, forex traders said.

At the interbank foreign exchange, the rupee opened weak at 85.23 and slipped further to hit a life-time low of 85.25 against the greenback in initial deals, registering a loss of 10 paise against its previous closing level.

On Tuesday, the rupee fell 4 paise to settle at a record low of 85.15 against the US dollar. The forex markets were closed on Wednesday for Christmas.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading marginally lower by 0.11 per cent but remained elevated at 107.90, amid soaring US Treasury yields and the fear of delayed interest rate cuts by the US Federal Reserve.

Brent crude, the global oil benchmark, rose 0.38 per cent to USD 73.86 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex was trading higher by 335.63 points, or 0.43 per cent at 78,808.50 points. The Nifty was up 103.55 points, or 0.44 per cent, at 23,831.20 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth Rs 2,454.21 crore, according to exchange data.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.