Industrial output growth slipped to 2.7 per cent in March as against 5.5 per cent a year ago, as per the new base year 2011-12.
The rupee opened extremely bullish at 64.12 as against last weekend level of 64.31 at the interbank foreign exchange market amid smooth supply of the US currency.
It strengthened further to hit a fresh intra-day high of 64.03 before ending at 64.05, revealing a rise of 26 paise, or 0.40 per cent.
The local unit has appreciated by a healthy 58 paise in the last three sessions.
The Reserve Bank of India fixed the reference rate for the dollar at 64.1188 and for the euro at 70.1332.
Growing evidence of receding inflationary pressures fuelled further optimism over the strength of the economic recovery and added to expectations for the RBI to cut interest rates.
Besides, a smart rally in local equities along with massive capital inflows also aided the rupee spike. According to latest depository data, FPIs invested a net Rs 5,318 crore ($825 million) in debt markets during May 2-12.
Domestic equities closed at a new record high on hardening expectations of a rate cut by the Reserve Bank of India after consumer inflation eased in April to its lowest in at least five years.
The flagship Sensex shot up 134 points to end at 30,322.12, while broader Nifty jumped by 44.50 points at 9,445.40.
Meanwhile, the greenback started the week on the defensive after US economic data came in shy of expectations and a weekend missile test by North Korea further fuelled the political turmoil globally.
Global crude oil soared after Saudi Arabia and Russia voice support for extending OPEC-led production cut scheme due to expire mid-year through the first quarter of 2018.