Rupee Rises a Fourth Day as Faster Growth Draws Funds to India's Stocks

India’s rupee gained for a fourth day, the longest winning streak in a month, on speculation accelerating economic growth will draw more funds from abroad.

The currency touched a two-week high after overseas funds boosted their holdings of Indian equities to a record $85.8 billion on Sept. 2, having bought more shares than they sold every week since May. The Bombay Stock Exchange’s Sensitive Index has advanced 2.4 percent since the government on Aug. 31 said the economy expanded 8.8 percent in the last quarter, the most since 2007. The rupee was also supported after the dollar fell last week against all but one of 16 major currencies.

“The consolidation mode in the domestic equity market and the euro’s strong bullish momentum against the dollar are good for rupee bulls,” J. Moses Harding, a Mumbai-based executive vice president at IndusInd Bank Ltd., wrote in a research note today.

The rupee appreciated 0.3 percent to 46.51 per dollar as of 10:40 a.m. in Mumbai, according to data compiled by Bloomberg. That pared the currency’s loss this quarter to 0.2 percent, still the worst performance among the 10 most-traded Asian currencies.

Offshore forwards indicated the Indian currency will trade at 47.14 to the dollar in three months, compared with expectations of 47.29 at the end of last week. Forwards are agreements to buy or sell assets at a set price and date. Non- deliverable contracts are settled in dollars.

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