The rupee gained 4 paise to 82.33 against the US dollar in early trade on Wednesday, tracking positive sentiment in the domestic stock market and a relatively weak dollar against major currencies.
At the interbank exchange rate, the domestic unit strengthened at 82.32 per US dollar, then rose to 82.30. It later fell to 82.33 against the greenback, up 4 paise from its previous close.
On Tuesday, the rupee was trading at 82.37 against the US dollar.
Anand James, chief market strategist at Geojit Financial Services, said a slide to the 82 level is likely. “A sustained trade above 82.36 is needed to revive positivity.” At the same time, the dollar index, which shows the strength of the dollar against a basket of six currencies, decreased by 0.10 percent and reached 103.49.
The world futures of Brent oil rose by 1.21 percent and amounted to 78.39 dollars per barrel.
The 30-share BSE Sensex was up 403.21 points, or 0.70 percent, at 58,303.40, while the broader NSE Nifty was up 130.40 points, or 0.77 percent, at 17,173.70.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth Rs 3,086.96 crore, stock exchange data showed.
Expectations of a slower interest rate hike by the US Federal Reserve amid lower inflation also boosted overall sentiment.
In February, the US consumer price index was in line with expectations at 6%.
On the domestic front, inflation based on wholesale prices eased to 3.85 percent in January due to lower prices of manufactured goods, fuel and electricity, although food items were more expensive.
(Except for the headline, this story was not edited by NDTV staff and was published on a syndicated channel.)