Re rises to 1-mth high on rising inflow hopes

The rupee rose to the highest in more than a month on speculation capital flows from overseas will increase as growth in Asia's fourth-biggest economy lures global funds.

The currency rounded off five days of gains, the longest winning streak in more than two months, as data showed foreign investors almost doubled their daily purchases of stocks last week. Share sales by companies such as Power Grid Corporation of India Ltd are also attracting investors as economic growth, according to a government report last month, unexpectedly accelerated in the quarter ended June 30.

"The rupee's going through a new rally as flows from overseas increase,'' said Roy Paul, assistant manager of treasury at Federal Bank Ltd. in the southern Indian city of Kochi. "There's more strength left in the currency as the pipeline for dollar flows looks good.''

The currency, the best performer in Asia this year, rose 0.3 per cent to 40.5625 against the dollar, the highest since August 9, according to data compiled by Bloomberg.

Power Grid, the country's biggest electricity transmission company, said it received bids for all of the $732 million of shares it plans to sell on the first day of its offer yesterday.

Emaar Properties PJSC, the Middle East's biggest real-estate developer by market value, hired bankers last week to help sell shares in India. JPMorgan Chase & Co estimates Indian property developers will sell as much as $10 billion of shares in the next 18 months. The rupee, up 9 per cent this year, touched 40.215 against the dollar on July 24, the strongest since May 1998, Bloomberg data show.

Global funds bought a net daily average of $136.4 million of Indian shares in the week through Sept. 7, compared with an average $68.7 million the previous week, according to data provided by the Securities & Exchange Board of India.

Industrial output probably grew 9.6 per cent in July from a year earlier, compared with 9.8 per cent in June, according to the median estimate of 17 economists in a Bloomberg survey. The Central Statistical Organisation will release the report tomorrow at noon in New Delhi.