Mumbai, Oct 16 (PTI) The rupee appreciated 40 paise to 87.68 against the US dollar in early trade on Thursday, primarily driven by central bank intervention, a softer dollar index.

Forex traders said other supportive factors like positive domestic equities, lower crude oil prices and renewed foreign fund inflows also boosted investor sentiments.

At the interbank foreign exchange market, the rupee opened at 87.76 and then gained ground and touched an early high of 87.68 against the US dollar, registering a gain of 40 paise from its previous close.

On Wednesday, the rupee bounced back sharply by 73 paise to close at 88.08 against the US dollar on Wednesday, posting its biggest intraday gain in nearly four months.

The rupee rose on Wednesday largely on the back of easing global risk sentiment, optimism around India-US trade talks and likely intervention by the Reserve Bank of India (RBI).

"RBI ensured that the rupee opens higher, thus curbing all speculative trades yesterday and not allowing the rupee to fall past 88.39 on Wednesday," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Rupee opened on a positive note and is expected to trade in a range of 87.30 to 88.00 is a clear indication of the RBIs resolve to cut out all speculative trades which were taking the rupee lower.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.28 per cent to 98.51.

Brent crude, the global oil benchmark, rose 0.74 per cent to USD 62.37 per barrel in futures trade.

On the domestic equity market front, Sensex jumped 407.67 points to 83,013.10 in early trade, while the Nifty surged 104 points to 25,427.55.

Foreign Institutional Investors (FIIs) purchased equities worth Rs 68.64 crore on Wednesday, according to exchange data.

Meanwhile, India's exports grew 6.74 per cent to USD 36.38 billion in September, while imports jumped 16.6 per cent, widening the trade deficit to USD 31.15 billion, the highest in over a year. PTI DRR DR DR

Central bank intervention helps stabilize local currency, supporting appreciation amid a softer dollar and renewed capital inflows. Rupee appreciation in early trade was driven primarily by central bank intervention alongside a softer dollar index, stronger domestic equities, lower crude prices and renewed foreign fund inflows. The currency opened higher, touched an early intraday high and moved within a trading band reflecting the central bank's intent to curb speculative downward pressure and limit excessive volatility.