The rupee pared its initial gains and settled for the day 5 paise lower at 83.50 (provisional) against the US dollar on Monday, weighed down by elevated crude oil prices.

Forex traders said a weak trend in domestic equities also dented investor sentiments.

At the interbank foreign exchange, the local unit opened at 83.43, then touched an intra-day high of 83.42 and a low of 83.50 against the greenback. The rupee finally settled at 83.50 (provisional) against dollar, registering a fall of 5 paise over its previous close.

On Friday, the rupee inched up 1 paisa to settle at 83.45 against the US dollar.

Forex traders said US dollar demand from importers and a recovery in crude oil prices weighed on the rupee.

"We expect the rupee to trade with a slight positive bias on the rise in risk appetite in global markets. However, any recovery in crude oil prices may cap sharp upside. Any renewed geopolitical tensions in the Middle East may also weigh on rupee at higher levels," said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.

USD-INR spot price is expected to trade in a range of Rs 83.20 to Rs 83.70, Choudhary added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06 per cent higher at 105.09.

Brent crude futures, the global oil benchmark, advanced 0.80 per cent to USD 83.62 per barrel.

On the domestic equity market front, Sensex advanced 17.39 points, or 0.02 per cent, to settle at 73,895.54 points. The Nifty fell 33.15 points, or 0.15 per cent, to close at 22,442.70 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth Rs 2,391.98 crore, according to exchange data.

Meanwhile, India's forex reserves dropped USD 2.412 billion to USD 637.922 billion as on April 26, in the third consecutive weekly decline in the reserves, the Reserve Bank of India (RBI) said on Friday.

In the previous reporting week, the overall reserves had declined USD 2.28 billion to USD 640.33 billion.

On the macroeconomic front, the seasonally adjusted HSBC India Services Business Activity Index fell from 61.2 in March to 60.8 in April, highlighting one of the strongest growth rates seen in just under 14 years.

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