CAD narrowed sharply to USD 1.3 billion, or 0.2 per cent of GDP, on a sequential basis, mainly on account of a lower trade gap.

Forex dealers said a higher opening in domestic stock market supported the rupee, but the dollar's strength against other currencies overseas limited the gains.

The rupee had risen 8 paise to close at 63.84 against the greenback in yesterday's trade on persistent dollar selling by banks and exporters on hopes of foreign capital inflows amid a strong capital market.

Meanwhile, the benchmark BSE Sensex reclaimed the 27,000 mark by surging 159.64 points, or 0.59 percent, to 27,000.14 in early trade today.

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