Sharp gains in the domestic stock market also bolstered the rupee sentiment.
At the interbank foreign exchange market, the rupee opened strong at 87.94 and moved in a tight range due to restricted trade.
The rupee hit a low of 87.95 and a high of 87.88 in the early session.
The local unit later traded at 87.88 against the US dollar, up 14 paise over the previous close. On Friday, the rupee closed at 88.02 against the US dollar.
Stock and money markets are open on Monday. Stock exchanges will hold a special Muhurat trading session on Tuesday from 1.45 pm to 2.45 pm for Laxmi Pujan, according to notices by BSE and NSE. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, edged up 0.02 per cent to 98.45. Brent crude, the global oil benchmark, fell 0.31 per cent to USD 61.10 per barrel in futures trade. On the domestic equity market front, Sensex soared by 668.88 or 0.83 per cent to 84,621.07 while Nifty advanced by 202.25 points or 0.79 per cent to 25,912.50 in early trade on Monday.
Analysts said that capital markets are moved by sustained DII buying, marginal FII buying and news of brisk festival season sales of automobiles and white goods.
VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, “A marginal change in FII activity is discernible in recent days. FIIs have substantially reduced their selling and have even turned buyers in some days.
“For October up to 17th, FII selling has drastically reduced to only Rs 4,114 crore. The principal reason for this change in FII strategy is the reduced valuation differential between India and other markets. India’s underperformance during the last one year has opened up prospects for better performance, going forward.”
