By Anil Varma Dec. 3 (Bloomberg) -- India’s rupee rose for a second day as gains in global stocks signaled that steps taken by central banks worldwide to ease the credit crisis may be bolstering investor confidence. The currency climbed by the most in a week as stock exchange data showed overseas funds bought Indian shares worth a total $142 million more than they sold on Nov. 28 and Dec. 1, the most over such a period in four weeks. The Federal Reserve yesterday extended the terms of emergency loan programs to ease the credit crunch, following an interest-rate cut by the Reserve Bank of Australia and a pledge by the Bank of Japan that it would accept lower-grade corporate debt as collateral for loans. “The rupee should gradually recover from recent lows as investors return amid easing global risk aversion,” said Han Sia Yeo, a Singapore-based strategist at Bank of America Corp. “Central bank measures worldwide are helping this process.” The rupee strengthened 0.6 percent to 49.845 per dollar as of 9:26 a.m. in Mumbai, according to data compiled by Bloomberg. Six of the 10 most-traded Asian currencies outside Japan gained today. The Indian currency may rise to 49 by Dec. 31, Yeo said. The rupee has lost 0.9 percent since terrorists attacked India’s financial hub of Mumbai on Nov. 26, killing at least 195 people over almost four days. The currency’s 21 percent loss this year is the biggest since 1991, when a balance of payments crisis forced the South Asian nation to pawn its gold with the International Monetary Fund to pay for imports. To contact the reporters on this story: Anil Varma in Mumbai at avarma3@bloomberg.net.

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