By Anil Varma, Bloomberg
Mumbai: Rupee rose for a second day on speculation that rising corporate profit will attract more funds to the nation’s equities.
The currency headed for a ninth weekly gain while Sensex had the biggest advance in almost two weeks yesterday. Housing Development Finance Corp., an Indian mortgage lender partly owned by Citigroup Inc., and state-owned Canara Bank Ltd., reported better-than-forecast earnings this week.
“There’s scope for further rupee appreciation as long as the Reserve Bank of India doesn’t intervene in the market,” said Arun Kaul, treasurer at state-owned Punjab National Bank in New Delhi. Company earnings and stock prices are rising and “the rupee’s strength clearly shows more and more capital flows are coming in.”
The rupee rose 0.4% to 40.9412 against the dollar as of 11:35 a.m. in Mumbai, according to data compiled by Bloomberg. The currency has strengthened 0.4 % this week.
Average daily investment in local stocks by overseas funds was $63 million a day in April, compared with $15 million in March, according to the Securities & Exchange Board of India (SEBI). International investors bought $1.5 billion in stocks in April, half the total purchases this year.
The Bombay Stock Exchange’s Sensitive Index is poised for a fourth weekly advance as investments from overseas increase.
Housing Development yesterday said its profit in the three months through March rose 295 to Rs5.5 billion ($134.4 million), beating a median estimate of Rs5.05 billion. Canara Bank, the nation’s third-biggest lender by assets, reported a net profit of Rs5.05 billion for the quarter ended 31 March.
India’s economic growth probably accelerated for the third straight year to 9.2% in the fiscal year ended March, according to the government. That’s the second-fastest rate, after China, among the world’s major economies.