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Indian rupee today edged higher to 73.81 against the US dollar, its sixth straight day of rise against the greenback. Surging inflows from foreign investors have helped drive Indian equities sharply higher this month. Net foreign equity purchases of $14.5 billion so far this year through Nov. 25 are already the most since 2014, according to data compiled by Bloomberg.

The addition of 12 Indian stocks to MSCI Inc.’s global standard indexes in its quarterly review, effective from November 30, may also help boost inflows.

Rising for the fifth straight session, the rupee had appreciated 3 paise to close at 73.88 against the US dollar on Thursday, tracking heavy buying in domestic equities and sustained foreign fund inflows.

"US markets were shut on Thursday on account of Thanksgiving holiday and therefore there aren't many overnight cues. ECB minutes indicated that the members are concerned about disinflation. We may see the ECB expand asset purchases under its PEPP (Pandemic Emergency Purchase Program) or sweeten the terms of TLTROs or announce more of them to combat the disinflationary pressures," said Abhisekh Goenka, Founder and CEO, IFA Global.

"Focus today will be on the MSCI rebalancing related inflows. India's weightage in the MSCI EM has risen on account of increase in foreign ownership limit (as FPI limit in stocks have been increased to sectoral FDI limits). The increased weightage is to come into effect from 1st December onwards. Passive funds tracking the index would therefore have to increase their allocation to Indian equities. 12 new stocks are to be added to the index and 2 are to be removed. Close to $2.5 billion worth of passive inflows are expected. It will be interesting to see how aggressively the nationalized banks mop up inflows on behalf of RBI. Month end exporter selling is also likely to cap upside in USD-INR," he added.

The July-September quarter GDP data is due to be released today post market hours. India's economic activity likely picked up in the quarter to September after a record contraction the previous quarter. Economists in a Reuters poll forecast GDP to shrink 8.8%.(With Agency Inputs)

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