The rupee slipped 3 paise to close at 81.71 (provisional) against the US dollar on Tuesday as rising crude oil prices in the international market weighed on forex market sentiment.

However, a firm trend in domestic equities and a weak American currency overseas capped the losses in the local unit, forex traders said.

At the interbank foreign exchange market, the local unit opened strong at 81.58 but later slipped into the negative territory. During the session, it touched an intra-day high of 81.57 and a low of 81.74 against the greenback.

The local unit finally settled at 81.71, registering a decline of 3 paise over its previous close of 81.68.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.33 per cent to 106.33.

Global oil benchmark Brent crude futures surged 2.33 per cent to USD 85.13 per barrel.

On the domestic equity market front, the 30-share BSE Sensex advanced 177.04 points or 0.28 per cent to end at a fresh closing peak of 62,681.84, while the broader NSE Nifty gained 59.10 points or 0.32 per cent to record 18,621.85.

Foreign institutional investors (FIIs) were net buyers in the capital markets on Monday as they bought shares worth Rs 935.88 crore, according to exchange data.