The domestic unit settled the day up by 29 paise at 73.32 against the US dollar.
The rupee had settled 13 paise lower at 73.61 against the US dollar Wednesday. Forex market remained shut on Thursday on account of "Dussehra".
Meanwhile, market benchmark BSE Sensex plunged by 464 points or 1.33 per cent to close at 34,315.63 points due to losses in index major Reliance Industries, HDFC and Infosys.
"Despite the fall (in equity benchmark), rupee gained some weight supported by stability in oil prices," Vinod Nair, Head of Research, Geojit Financial Services Ltd.
Foreign fund inflows also supported the domestic currency. On a net basis, foreign funds bought shares worth Rs 140.02 crore, while domestic institutional investors sold shares to the tune of Rs 343.11 crore Wednesday, provisional data showed.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 73.4354 and for rupee/euro at 84.1741. The reference rate for rupee/British pound was fixed at 95.6525 and for rupee/100 Japanese yen was 65.27.
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