The Indian rupee on Tuesday appreciated by 37 paise against the US dollar to Rs 49.72 in early trade on dollar selling by banks amid strong Asian equity markets.
Dealers at the Interbank Foreign Exchange (Forex) market said that there was heavy dollar selling by banks on expectation of some easing in foreign fund withdrawals as equity markets opened higher in line with global markets.
Dollar's weakness against other major currencies also boosted the sentiment, they added.
Global markets soared on Tuesday following strong overnight rally on the US bourses after the US government bailed out troubled banking giant Citigroup.
The Dow Jones Industrial Average soared 4.70 per cent to 8,424.75 while the Nasdaq composite jumped 6.33 per cent to 1,472.02 last night.
Among Asian bourses, Hong Kong's Hang Seng was up by 4.58 per cent while Japan's Nikkei rose by 4.25 per cent in early trade.