- Religare Commodities predicts more gains for Indian currency
- Global funds bought a net $4.7 billion of shares in two months
The rupee rose to the highest level in almost two weeks as foreign funds boosted purchases of Indian stocks.
Overseas investors bought a net $4.7 billion of local shares over April and March after being sellers in the first two months of the year, data compiled by Bloomberg show. The S&P BSE Sensex index surged more than 11 percent in the two months through April. Religare Commodities Ltd. says equity inflows and a weak U.S. dollar will prompt more rupee gains.
The Indian currency rose to as high as 66.23 a dollar, the strongest level since April 21, before ending little changed at 66.4275 in Mumbai, according to prices from local banks compiled by Bloomberg. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 global peers, slumped 7.4 percent in the last three months amid speculation the Federal Reserve will go slow in raising U.S. interest rates. It was little changed on Tuesday after three straight days of declines.
“Gains in India’s stock market and a broad weakness in the dollar index is helping the rupee,” said Gaurav Sharma, a senior currency analyst at Religare Commodities in Noida, near New Delhi. “We see the strengthening bias continuing with sustained capital inflows.”
The currency is down 0.4 percent this year in Asia’s worst performance.
Indian sovereign bonds were little changed, with the yield on notes due January 2026 at 7.44 percent, according to prices from the central bank’s trading system. The yield slid 20 basis points since the end of January.