Against the US dollar, the rupee gained 45 paise and closed Friday at 79.24 (provisional) as heavy domestic equity purchases and dollar weakness boosted investor sentiment.
In addition, the influx of new foreign capital also supported domestic unity, forex dealers said.
In the interbank foreign exchange market, the domestic currency opened strongly at 79.55 per dollar. It hovered in a range of 79.56 to 79.17 during the session.
The domestic unit eventually settled at 79.24 against the greenback, a gain of 45 paise from the last closing price.
In the previous session, the rupee appreciated 22 paise to close at 79.69 against the US dollar.
In the domestic stock market, the BSE Sensex finished 712.46 points or 1.25 percent higher at 57,570.25, while the broader NSE Nifty rose 228.65 points or 1.35 percent to 17,158.25.
The dollar index, which measures the dollar’s strength against a basket of six currencies, fell 0.21 percent to 106.13.
Foreign institutional investors became net buyers in the capital markets when they picked up shares worth Rs 1,637.69 crore on Thursday, according to stock market data.
Brent oil futures, the global oil benchmark, rose 2.28 percent to $109.58 a barrel.