The rupee appreciated by 10 paise to 74.05 per US dollar on Tuesday's opening trade, as intense buying in domestic equities amid positive COVID-19 vaccine news strengthened investor sentiments. Continued foreign fund inflows and weak American currency also supported the local unit.
The domestic currency opened up at 74.04 per US dollar at the interbank forex market, although, edged slightly lower to 74.05 in early deals, rising 10 paise over its last close.
In the previous session, the rupee had settled 7 paise lower at 74.15 amid rising US dollar and oil prices.
On the domestic equity front, Sensex and Nifty hit all time highs on Tuesday, amid positive global equities. Traders said investors reacted to Democrat Joe Biden's win against incumbent Donald Trump in the U.S. presidential poll and to positive developments overnight on the coronavirus vaccine front. Extending gains for the seventh straight session, Sensex gained 516 points to 43,115 and Nifty rose 121 points to 12,582.
Iinvestors cheered as trial data from drugmakers Pfizer and BioNTech indicated their Covid-19 vaccine is more than 90% effective. Pfizer and BioNTech said they had found no serious safety concerns so far and expected to seek U.S. emergency use authorization later this month.
Worldwide, there were 512 lakh confirmed cases and 12.69 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload neared the 86-lakh mark and death toll from COVID-19 infections rose to 1.27 lakh, as of today.
The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.05 per cent to 92.66.
Foreign portfolio investors (FPIs) bought shares worth Rs 4,548.39 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 3,036.31 crore in the Indian equity market on 9 November, provisional data showed.
"News of encouraging results (90 per cent of symptomatic infections) on coronavirus vaccine front from trials conducted by Pfizer fuelled a major rally in risk assets," Abhishek Goenka, Founder and CEO, IFA Global, said.
Meanwhile, Brent crude futures, the global oil benchmark, fell 0.90 per cent to USD 42.02 per barrel. Yesterday, oil prices rose more than 8%, biggest in 6 months, after Pfizer announced 90% effectiveness from its vaccine against Covid-19 added demand hopes.