Indian rupee, the domestic currency opened on a flat note and appreciated 3 paise to 73.14 against the US dollar on Wednesday's opening trade, tracking most Asian currencies amid concerns about more lockdowns in major economies.
The domestic unit opened at 73.16 against the US dollar at the interbank forex market, and rose 3 paise higher to 73.14 over its previous close.
On Tuesday, the rupee closed 15 paise lower at 73.17 against US dollar.
Meanwhile, the dollar index rose 0.06 per cent to 89.48 against a basket of six currencies.
"Rising COVID-19 infections could push investors towards the safe haven appeal of the US dollar and cap gains for the domestic unit. However, foreign portfolio investor (FPI) flows into the domestic equity markets could cap losses," Reliance Securities said in a research note.
On the domestic equity market front, market indices turned volatile after opening at record highs, tracking cues from mixed global equities. Sensex fell 49 points to 48,378 and Nifty was trading 6 points higher at 14,205. Rising for the eleventh straight session, Sensex earlier opened 190 points higher at 48,592 and Nifty gained by 41 points to 14,240. During the session, Sensex hit a lifetime high of 48,616 and Nifty rose to a new high of 14,244.
Foreign portfolio investors (FPIs) bought shares worth Rs 986.30 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 490.03 crore in the Indian equity market on 5 January, provisional data showed.
Brent crude futures, the global oil benchmark, rose 0.52 per cent to USD 53.88 per barrel. Oil price jumped significantly to 10-month high and remains positive after Saudi pledged to cut an extra 1mln barrels a day of crude output in Feb & March.