MUMBAI, Oct 19 (Reuters) - The Indian rupee breached the key 83 per dollar mark to fall to a record low on Wednesday, as spiking U.S. yields increased demand for the greenback, while local traders cited large corporate dollar outflows hitting the market.

The partially convertible rupee tumbled 0.8% to close at its lifetime low of 83.02 per dollar, with losses accelerating in the last one hour of trade.

The currency had floundered near 82.40 through most of the session, with traders earlier suspecting the Reserve Bank of India was holding it around that level. Once the rupee breached it, there was "panic dollar buying", the dealers added.

Later, multiple Mumbai-based traders at private banks said large dollar demand from two public sector companies had contributed to the rupee's fall to record low.

Two traders said that one of the companies bidding for dollars was state-run gas company GAIL Ltd.

GAIL did not immediately reply to a Reuters e-mail seeking comment.

"As RBI left the 82.40 levels...no level seems to be sacrosanct on the rupee and therefore 83.50 should be the next target once 83.00 is breached," said Anil Bhansali, head of treasury at Finrex Treasury.

Globally, stocks and currencies declined, while the dollar index gained, as sentiment was caught between upbeat earnings and further signs that strong inflation will keep major central banks firmly in rate-hiking mode.

U.S. benchmark 10-year yields jumped to 4.0810% to their highest level since 2008, further adding to the greenback's appeal.

Meanwhile, the offshore Chinese yuan weakening to near 7.25-levels soured sentiment, setting off a broader decline in Asian currencies. (Reporting by Anushka Trivedi in Mumbai; Editing by Neha Arora)