The rupee surged 20 paise to 77.24 against the U.S. dollar in early trade on Tuesday, as a firm trend in domestic equity markets and receding global crude prices boosted investor sentiment.
Besides, a weak American currency against its global rivals also helped the domestic unit, Forex traders said.
However, rising concerns over higher interest rates and weakness in global economic growth kept the appreciation bias in check, they added.
At the interbank foreign exchange, the rupee opened sharply strong at 77.27 against the American dollar, and gained more strength to quote 77.24 in early trade, registering a rise of 20 paise from the last close. It was moving in the range of 77.22 to 77.29.
In the previous session, the rupee had slumped 54 paise to close at an all-time low of 77.44 against the U.S. dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.07% to 103.58.
On the domestic equity market front, the 30-share Sensex was trading 138.53 points or 0.25% higher at 54,609.20, while the broader NSE Nifty gained 34.85 points or 0.21% to 16,336.70.
Global oil benchmark Brent crude futures fell 1.77% to $104.06 per barrel.
LIC's mega public offering—India's largest till date—on Monday closed with nearly 3 times subscription, predominately lapped up by domestic retail and institutional buyers but foreign investor participation remained muted.
Foreign institutional investors remained net sellers in the capital market on Monday, as they offloaded shares worth ₹3,361.80 crore, as per stock exchange data.
