By Anil Varma Dec. 10 (Bloomberg) -- India’s rupee advanced for a sixth day, the longest winning streak in more than a month, as stock gains added to speculation investors are increasing investment in the country. The currency gained the most in more than five weeks after the government announced this week a 200-billion rupee ($4 billion) stimulus package, including a cut in consumption tax, to bolster economic growth. Overseas investors bought more Indian shares than they sold on four of the first six trading days of this month, data from the nation’s capital markets regulator showed. “The rupee’s bias is to strengthen as the region’s stock- market sentiment is generally positive,” said Sudarshan Bhatt, chief currency trader at state-owned Corporation Bank in Mumbai. “Dollar sales may increase as capital inflows improve.” The rupee strengthened 1.1 percent to 49.02 per dollar as of the 5 p.m. close in Mumbai, according to data compiled by Bloomberg. Eight of the 10 most-traded Asian currencies outside Japan gained today. The rupee has rebounded 2.8 percent from a record low of 50.615 touched on Dec. 2. The currency’s 20 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. Shares Advance India’s benchmark share index, the Bombay Stock Exchange’s Sensitive Index, climbed 5.4 percent today, adding to yesterday’s 2.2 percent gain. That’s the biggest two-day advance since Nov. 10. Overseas funds bought $76.2 million more local equities than they sold this month, according to the Securities and Exchange Board of India. The rupee also gained as offshore forward contracts showed traders scaled back bets for how far the currency will weaken in the next month. Non-deliverable contracts show the currency will trade at 49.08 a month from now, compared with expectations for 50.03 on Dec. 5. “There’s been good dollar selling in the NDF market,” Corporation Bank’s Bhatt said. “That’s bound to influence the rupee locally too.” Forwards are agreements in which assets are bought and sold at current prices for future delivery. Indian rupee forwards traded overseas are non-deliverable, meaning they are settled in dollars rather than the local currency. To contact the reporters on this story: Anil Varma in Mumbai at avarma3@bloomberg.net.

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