The Indian rupee appreciated by 10 paise to 71.21 against the US dollar in early trade on Wednesday tracking gains in domestic equity market. Forex traders said rupee is trading in a narrow range amid amid fast-spreading coronavirus outbreak in China stoking fears about more trouble for the global economy.

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At the interbank foreign exchange the rupee opened at 71.23, than gained further ground and touched a high of 71.21 against the US dollar, registering a rise of 10 paise over its previous close.

On Tuesday, rupee had settled for the day at 71.31 against the US dollar.

Domestic bourses opened on a positive note on Wednesday with benchmark indices Sensex trading 320.32 points higher at 41,287.18 and Nifty up 92.90 points at 12,148.70.

Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 1,357.56 crore on Tuesday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, rose 1.36 per cent to trade at 60.32 per barrel.

However, strengthening of the American currency vis-a-vis other currencies overseas weighed on the rupee.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.01 per cent to 98.02.

The 10-year government bond yield was at 6.59 per cent in morning trade.

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Meanwhile, on the global front, the United States said Tuesday it was developing a vaccine against a deadly virus that originated in China.