The rupee opened strong and appreciated by 23 paise to Rs 68.74 against the US dollar at the interbank forex market and gained further ground to touch Rs 68.74 per dollar, displaying gains of 23 paise over its last close. On Thursday, Indian rupee closed at 68.95 per US dollar.
Forex traders said rupee along with other Asian currencies were trading in the positive territory following dovish comments from both New York Fed President John Williams and Vice Chair Richard Clarida.
The dollar index representing the American currency rose 0.03% to 96.81. Traders said foreign fund outflows and cautious opening in domestic equities weighed on the local unit.
Sensex dropped nearly 200 points in early trade Friday with Nifty falling below 11,550 level on the back of lackluster trade by investors amid earning's season, heavy foreign fund outflow and weak domestic headwinds.
The market opened higher following a rally in other Asian equities on hopes of US Fed rate cut. Although the 30-share index opened over 150 points tracking rally global equities, it later erased its gains.
Pressured by selling interest in Auto and Media stocks, BSE Sensex was 263 points down at 38,642 against the last close of 38,897.46. The index swung nearly 400 points in the first hour of the session.
Similarly, the broader NSE Nifty50 was at 11,524, down by 72 points, against the last close of 11,596.
In the previous session, BSE S&P Sensex ended at 38,897 with 318 points of decline, and NSE Nifty50 closed lower by 90 points down at 11,596 by the closing bell.
However, unabated foreign fund outflow, disappointing earnings and reports of slowing economic growth dented market sentiment here, traders said.
Top losers in the Sensex pack included Yes Bank, M&M, Bajaj Finance, Tata Motors, ONGC and Maruti, whereas Tata Steel, TCS, Vedanta, HUCL, PowerGrid, HCL Tech, HDFC Bank and Infosys were among the top gainers.
"Foreign funds are on a risk-off mode, while domestic mutual funds are providing marginal support in the market," said Vinod Nair, Head of Research, Geojit Financial Services.
The net investment of equity and debt reported by Foreign portfolio investment (FPIs) remained bearish with net selling of Rs 1,404.86 crore from Indian equities while Domestic institutional investors (DIIs) have bought Rs 329.05 crore Thursday.
Shares of index-heavyweight Reliance Industries Ltd. were trading 0.34% lower ahead of its quarterly results, scheduled to be announced later in the day.
Listed companies namely Reliance Industries, RBL Bank, Dabur India, L&T Finance Holdings, InterGlobe Aviation, Bandhan Bank, L&T Technology Services, ICICI Lombard General Insurance Company, Bhageria Industries, Hindustan Zinc, Dhanuka Agritech, Mahindra CIE Automotive, JM Financial, Phillips Carbon Black, Indbank Merchant Banking Services, Tokyo Plast International are due to submit their quarterly earnings report today.
Meanwhile, Brent crude futures, the global benchmark, was trading at $63.18 per barrel higher by 2.02%.
Elsewhere in Asia, Shanghai Composite Index, Hang Seng, Nikkei and Kospi were trading over 1% higher in their respective early sessions.
(Edited with agency inputs)