Mumbai: The Indian rupee hit a 5-year low at 47.10/11 against the US dollar before, its weakest since June 2003, before closing at 47.04 a dollar, amidst increased outflows and heavy demand from oil refiners and importers.

The rupee slumped to its five-year low as fund sales spurred stock declines and a $700 billion US bank rescue plan helped bolster the dollar.

The rupee, which opened trading at 46.90/91 a dollar, nosedived to 47.10/11 a dollar by 2:37 pm, its weakest since 2 June 2003, and more than 1 per cent weaker than its Friday's close of 46.545/555 a dollar.

Sharp losses on the share market raised worries about capital outflows. Foreign funds invested in Indian stocks are on a selling spree amidst a worsening financial crisis in the US. Three major investors - Morgan Stanley, Goldman Sachs and Merrill Lynch - offloaded as much as Rs170 crore in open market transactions.

Indian stock markets have witnessed net FII sales of nearly $2 billion so far this month.

Overseas investors have sold $9.2 billion more of local equities this year than they bought, according to data from the Securities & Exchange Board of India. They bought a record $17.2 billion in stocks last year, powering the rupee's best annual gain in at least 34 years.