The rupee fell 5 paise to 83.54 versus the US dollar in early trading on Thursday, driven down by high crude oil prices. Forex dealers saw a bullish trend in local stocks, with benchmark indexes reaching all-time highs, and large foreign capital inflows supporting the rupee and limiting its slide. In early trades on the interbank foreign currency market, the rupee began at 83.52 and fell further to trade at 83.54 versus the US dollar, a 5 paise drop from its previous closing level. On Wednesday, the rupee fell 1 paisa to 83.49 versus the US dollar

"Although the equity markets shine brightly, the Indian rupee has been trading flat to lower, despite a decrease in the dollar to 105.04 and US 10-year rates reaching 4.35 percent, following the US service PMI and ADP non-farm job change data being less than predicted," CR Forex Advisors MD Amit Pabari said.

According to Pabari, crude oil prices have climbed to around $87 per barrel, acting as a counterbalance to the rupee's advances. "However, improved fundamentals, robust inflows, and equities markets at an all-time high are colliding with transitory external forces. As these external pressures subside, the Indian rupee is expected to strengthen," Pabari remarked.

Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was at 105.36. Brent crude futures are the worldwide oil benchmark, Oil prices fell 0.55 percent to $86.86 per barrel.

In early trading, the Sensex broke beyond the historic 80,000-mark, while the Nifty achieved new lifetime highs. The BSE Sensex was up 224.79 points, or 0.28 percent, at 80,211.59 points. The wider NSE Nifty rose 67.80 points, or 0.28%, to 24,354.30 points. Foreign Institutional Investors (FIIs) were net purchasers in the capital markets on Wednesday, buying shares worth Rs 5,483.63 crore, according to exchange data.

Meanwhile, according to an official from S&P Global Ratings, a sovereign rating upgrade for India in the next 24 months is achievable provided the central government is able to wisely manage its finances and bring down the budget deficit to 4% of GDP. According to S&P Global Ratings' Director of Sovereign Ratings, YeeFarn Phua, an upgrade would occur if the government deficit (Centre + states) falls below 7% of GDP, with the central government playing a significant role