New Delhi: The rupee rose to the highest in more than nine years after overseas investors stepped up purchases of Indian equities.
Indian shares bought by foreign investors this year already exceed those for the whole of 2006, making the rupee the second-best performer among the 10 most-active Asian currencies. The benchmark Bombay Stock Exchange’s sensitive index extended last week’s record closing high.
“The rupee is poised to rise because of persistent pressure from the capital flows,” said Pradeep Khanna, chief currency trader at HSBC Holdings Plc. in Mumbai. “The undertone should remain bullish on the rupee in the near term.”
The local currency gained 0.1% to 40.2925 against the dollar as of the 5pm close in Mumbai. That’s the highest since 13 May 1998.
Construction of highways and demand for transporting goods and people across the world’s second-fastest growing major economy is benefiting Indian auto makers such as Tata Motors Ltd and Ashok Leyland Ltd.
Passenger car sales rose in June at the fastest pace in four months as companies launched new models. Car sales may triple to three million units by 2016, the Society of Indian Automobile Manufacturers says.