The rupee depreciated 26 paise to 73.83 against the US dollar in opening trade on Thursday as selloff in domestic equities and significant foreign fund outflows weighed on investor sentiment.

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At the interbank forex market, the rupee opened on a weak note at 73.82, then fell further to 73.83, registering a fall of 26 paise over its last close.

On Wednesday, the rupee appreciated by one paisa to close at 73.57 against the US dollar.

"Given the uncertainty to economic outlook from the second wave of COVID-19 cases, US presidential elections and US stimulus package, investors are shunning risky assets. Commodities and equities have sold off," Abhishek Goenka, Founder and CEO, IFA Global.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.03 per cent to 94.41.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 510.46 points lower at 37,157.96 and broader NSE Nifty plunged 155.45 points to 10,976.40.

Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 3,912.44 crore on Wednesday, according to provisional exchange data.

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Brent crude futures, the global oil benchmark, fell 1.01 per cent to USD 41.35 per barrel.