Rupee Climbs Most in a Week as India Stock Inflow Spurs Optimism

The rupee climbed the most in a week as the U.S. dollar weakened and on signs overseas demand for Indian stocks is intact.

Foreign investors have bought a net $254 million of local shares so far in October, an eighth straight month of inflows, data compiled by Bloomberg show. The S&P BSE Sensex, the nation’s benchmark equity measure, added 0.1 percent, halting a three-day decline. A gauge of the greenback fell for a second day after Donald Trump and Hillary Clinton sparred in their second U.S. presidential debate.

“A weaker dollar seems to be helping the rupee, which is also getting supported by equity flows,” said Bhupesh Bameta, head of research for currencies and rates at Edelweiss Financial Services Ltd.. Going forward, the rupee will be on a “weaker footing” due to a possible interest-rate increase by the Federal Reserve, he said.

The rupee rose 0.2 percent to 66.5350 per dollar at the close in Mumbai, its biggest gain since Sept. 30, prices from local banks compiled by Bloomberg show. The currency may weaken to 68 by November, said Bameta. Indian markets are shut Tuesday and Wednesday for public holidays.

Sovereign bonds climbed, snapping two days of losses. The yield on government notes due September 2026 fell two basis points to 6.71 percent, according to the Reserve Bank of India’s trading system. There’s no sovereign-debt auction scheduled for this Friday.

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