The rupee advanced and bonds extended losses after third-quarter economic growth beat analysts? forecasts, raising optimism global investors will add to this year?s record purchases of the nation?s assets.
Gross domestic product increased 7.9% in the period to September 30 from a year earlier after a 6.1% gain in the previous quarter, the Central Statistical Organisation said in New Delhi.
?The efforts of the central bank and the government in the past year have borne fruit,? said Sanjay Arya, a treasurer at Bank of Maharashtra. ?The data has shown India continues to be driven by domestic demand and it can leave the impact of the recent global crisis behind. I am expecting capital inflows to accelerate.? The rupee rose 0.3% to 46.5175 per dollar at the close.
Global funds bought $15.3 billion more Indian equities than they sold this year through November 26.
Bonds fell, pushing the benchmark 10-year yield to the highest since November 18 as faster economic growth heightened concern the central bank will raise borrowing costs from all- time lows to prevent inflation from accelerating.
The yield on the 6.9% note due in July 2019 climbed 7 bps to 7.26% at the close.