Mumbai, May 22 (PTI) The rupee rose for the second consecutive session on Friday to close sharply higher at 95.60 against the US dollar on softening of crude oil prices and supposed intervention by the Reserve Bank.

Forex traders said markets found some comfort after comments from US Secretary of State Marco Rubio hinted that diplomatic talks linked to the Iran situation were moving in a constructive direction.

Moreover, positive domestic equities and a decline in US treasury yields also supported the rupee.

At the interbank foreign exchange market, the rupee opened at 96.30 against the US dollar and stayed firm during the intraday. At the end of the trading session, the rupee was quoted at 95.60, higher by 76 paise from its previous close.

On Thursday, the rupee rebounded 50 paise from its all-time closing low to settle at 96.36 against the US dollar.

"We expect the rupee to trade with a negative bias on uncertainty between the US and Iran, which may pressurise the rupee. However, optimism over the peace deal and softening of crude oil prices may support the rupee at lower levels.

"US Treasury yields are also easing, which may also support the domestic currency. USD-INR spot price is expected to trade in a range of 95.50 to 96.30," said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan.

Sahil Kapoor, Head of Products and Market Strategist, SVP, DSP Mutual Fund, in a research note, said it is time to buy rupee assets and not bet against them.

"Currencies, interest rates, and flows are inherently cyclical. Betting against the rupee at these depressed REER levels and tight inflation differentials is a low-probability trade. Conversely, the data suggests it is time to allocate toward rupee-denominated assets across both equities and bonds," he said.

Dilip Parmar, Research Analyst, HDFC Securities, said the rupee maintained its upward momentum for the second straight day, reversing the losses sustained at the start of the week.

"This turnaround is largely attributed to the Reserve Bank of India's active market intervention post the announcement of its USD-INR buy-sell swap, alongside a reprieve in imported commodity prices as geopolitical risks ease. Technically, spot USD-INR faces resistance at 96.20 and support at 95.40," Parmar said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.29, down 0.04 per cent.

Brent crude, the global oil benchmark, was trading up 2.18 per cent at USD 104.82 per barrel in futures trade.

On the domestic equity market front, Sensex climbed 231.99 points to settle at 75,415.35, while the Nifty advanced 64.60 points to 23,719.30 Foreign Institutional Investors offloaded equities worth Rs 4,440.47 crore on a net basis on Friday, according to exchange data.

The country's forex reserves dropped USD 8.094 billion to USD 688.894 billion during the week ended May 15, the Reserve Bank of India (RBI) said on Friday. In the preceding week ending May 8, the overall reserves had jumped by USD 6.295 billion to USD 696.988 billion. PTI DRR HVA