The rupee surged 13 paise to 73.90 against the U.S. dollar in opening trade on Tuesday as IPO-related inflows and easing crude oil prices supported the local unit.
At the interbank foreign exchange, the rupee opened on a strong note at 73.92 against the dollar, then gained further ground and touched 73.90 in early deals, a rise of 13 paise over its previous close.
On Monday, the rupee had settled at 74.03 against the U.S. dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.09% to 93.96.
The Indian rupee opened stronger this Tuesday as concerns over the effects of the U.S. Federal Reserve's bond tapering subsided and positive domestic factors took precedence, Reliance Securities said in a research note.
Moreover, expectations of foreign inflows worth as much as $2 billion into a slew of Indian initial public offerings and signs of a stabilisation in oil prices have also lifted sentiments.
However, the Reserve Bank of India's presence could cap the appreciation bias, the note said.
Global oil benchmark Brent crude futures fell 0.13% to $83.32 per barrel.
On the domestic equity market front, BSE Sensex was trading 69.54 points or 0.11 % lower at 60,476.07, while the broader NSE Nifty declined 10.70 points or 0.06% to 18,057.85.
Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth ₹860.65 crore, as per exchange data.