The rupee strengthened to 63.94 against the dollar as the dust settled on the political landscape in Gujarat and Himachal Pradesh with the BJP getting ready to form the next government in both states. The BJP has returned to power for the sixth straight term in Gujarat and unseated the Congress in Himachal Pradesh.

The domestic unit opened a tad strong at 64.22 at the Interbank Foreign Exchange market today. It hovered in a range of 64.22 and 63.94 before quoting at 64.08, up 16 paise at 4.05 pm local time. Yesterday, the rupee had lost 20 paise to 64.24.

Meanwhile, the 30-share BSE index Sensex ended higher by 235.06 points or 0.7 per cent at 33,836.74 and the 50-share NSE index Nifty closed up 74.45 points or 0.72 per cent at 10,463.20.

The dollar remained mired in its recent ranges on Tuesday, as optimism that the US tax reform Bill would pass duelled with concerns about what its ultimate effect on growth would be. The dollar index, which tracks the US currency against a basket of six major rivals, was steady on the day at 93.714.