The rupee on Friday rose by 10 paise to 53.60 against the US dollar in early trade, extending gains for the fourth straight session at the Interbank Foreign Exchange market on the back of increased capital inflows.

Sustained dollar sales by exporters and banks and a higher opening in the equity market also boosted the rupee sentiment, forex dealers said.

However, dollar's gains against the euro overseas backed by fresh concerns over Greece, capped the gains, he added.

The local currency had ended 10 paise higher at 53.70 against the dollar on Thursday on following firm local stock markets and capital inflows.

Meanwhile, the BSE benchmark index Sensex rose by 160.74 points, or 0.87%, to 18,722.44 in early trade on Friday.