Dollar is closed at 67.7925 against its opening of 68.1300. Dollar pared losses at during afternoon trades Wednesday on buying by oil importers as Brent crude oil prices inched traded near $78 a barrel. Brent crude oil price hit a new high of over $79 a barrel on May 15 tracking data about higher demand in key markets such as China amid OPEC's bullish Monthly Oil Market Report, in which the cartel said the global overhang in oil inventories is all but gone. Locally, investors' would track Karnataka governor Vajubhai Vala's decision where he is expected to invite either single largest party BJP, or Congress-JDS led alliances to form government in the southern Indian state. Political uncertainty, rising global yields and the reflation trades in advanced economies and inflationary impact of higher oil prices are weighing on rupee.

Sensex provisionally ends 175 points down with 19 components in the red.

INTERNATIONAL

Asian stock markets dipped on Wednesday after Pyongyang abruptly called off talks with Seoul, throwing a U.S.-North Korean summit into doubt, while surging bond yields revived worries about faster U.S. interest rate hikes that could curb global demand.

Gold prices recovered slightly on Wednesday after sliding to the lowest level in 2018 earlier in the day amid surging U.S. treasury yields and a stronger dollar.

Oil prices retreated from multi-year highs on Wednesday morning in Asia, pulled back by an industry organization’s comment that U.S. crude stockpiles built unexpectedly last week.

Japan's economy contracted more than expected at the start of this year, suggesting growth has peaked after the best run of expansion in decades, unwelcome news for a government struggling to get traction for its reflationary policies.