Rupee appreciates 21 paise to 73.90 against US dollar in early trade

The rupee appreciated 21 paise to 73.90 against the US dollar in the opening session on Tuesday, tracking strong opening in domestic equities and weak American currency.

Traders said investor risk sentiment improved amid growing hopes of an early rollout and efficacy of COVID-19 vaccines.

At the interbank forex market, the domestic unit opened at 74.10 against the US dollar, and then it gained ground to touch 73.90 against the greenback, registering a rise of 21 paise over its previous close.

On Monday, the rupee had appreciated 5 paise to settle at more than two-week high of 74.11 against the US dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.04 per cent to 92.47.

Pharma major AstraZeneca said on Monday said that an interim analysis of clinical trials of its COVID-19 vaccine in the UK and Brazil showed that it was 70 per cent effective on average, becoming the third drugmaker to announce promising results to contain the deadly virus.

Meanwhile, foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 4,738.44 crore on a net basis on Monday, according to exchange data.

"Foreign fund inflows into the domestic equity markets could also help the local unit. However, these flows are being continuously mopped up by the central bank," Reliance Securities said in a research note.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 392.99 points higher at 44,470.14, and the broader NSE Nifty rose 114.55 points to 13,041.00.

Brent crude futures, the global oil benchmark, rose 0.91 per cent to USD 46.48 per barrel.