The India rupee appreciated 30 paise to 79.39 against the US dollar in opening trade on Friday, buoyed by fresh foreign fund inflows into capital markets and a firm trend in the domestic equities.
Besides, a weak greenback overseas against key rivals supported the local unit, traders said.
At the interbank foreign exchange, the rupee opened sharply up at 79.55 against the US dollar, then gained further momentum to quote 79.39 in early deals, registering a gain of 30 paise over the last close.
In the previous session, the rupee had settled at 79.69 against the American currency.
On the domestic equity market front, the 30-share Sensex was trading 594.25 points or 1.05 per cent higher at 57,452.04, while the broader NSE Nifty rose 182.85 points or 1.08 per cent to 17,112.45.
The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.30 per cent to 106.03.
Global oil benchmark Brent crude futures slipped 0.11 per cent to $107.02 per barrel.
Foreign institutional investors turned net buyers in the capital markets as they picked up shares worth Rs 1,637.69 crore on Thursday, as per exchange data.
Meanwhile, Axis Bank chief economist Saugata Bhattacharya on Thursday said the Reserve Bank of India's rate-setting panel is expected to hike repo rate by 0.35-0.50 percentage points at the next week's review meeting in an attempt to stem inflation.