India’s rupee rose to the highest in more than nine years on speculation the benchmark stock index’s advance to a record will attract foreign investors.
Overseas funds have bought more stocks than they sold for 13 days through Oct. 9, the longest buying spree in almost three months, helping the rupee rise to the strongest since February 1998.
Industrial production growth probably accelerated for the first time in five months in August, economists forecast a report will show tomorrow.
?There is investment opportunity in Asia and particularly in India,” said Sanjay Arya, treasurer at state-owned Bank of Maharashtra in Mumbai. “I expect inflows to continue for a while and help the rupee rise further.?
India’s currency rose to 39.3035 against the dollar at the 5 p.m. close in Mumbai, from 39.315 yesterday, according to data compiled by Bloomberg. It may reach 38.55 by the end of March, Arya said. That’s more bullish than the median forecast of 40.23 by 26 banks surveyed by Bloomberg.
The Bombay Stock Exchange’s Sensitive Index touched a record after global funds bought a net $6.4 billion worth of Indian stocks since the Federal Reserve cut rates on September 18.
India’s government is spending more on building ports and roads to bolster economic growth and reduce poverty in the world’s second-most populous nation.
It will buy equipment and machinery worth 16.8 billion rupees ($427 million) to build four heavy-water nuclear reactors of 700 megawatts each to meet rising energy demand, Finance Minister P. Chidambaram said on October 9.
Production at factories, utilities and mines rose 8.6% from a year earlier after gaining 7.1% in July, according to the median forecast of 18 economists in a Bloomberg News survey.
India’s 10-year bonds gained for the third day on speculation banks, the biggest buyers of debt, will use their surplus cash to invest in the securities.
The benchmark bonds held gains from their past two sessions as funds at lenders increased because of rupee sales by the Reserve Bank of India to curb the currency’s gains.