* Foreigners net buyers of $200 mln stocks in 4 of 5 days * Banks cut long dollar positions (Updates to mid-morning) MUMBAI, Feb 13 (Reuters) - The Indian rupee rose on Friday as banks cut long dollar positions on the back of the U.S. unit's weakness overseas, while higher stocks also helped sentiment. At 10:30 a.m. (0500 GMT), the partially convertible rupee was at 48.72/73 per dollar, 0.3 percent stronger than its Thursday's close of 48.85/86. Indian shares rose more than 1.5 percent early, with investors upbeat on higher Asian markets and ahead of an interim railway budget due at 11 a.m. (0530 GMT) that could cut some freight rates. [.BO] Foreign funds were net buyers of nearly $200 million of stocks in four of the five days to Wednesday, lowering the outflow this year to about $900 million. The fund flows have a big impact on the rupee, which fell 19.1 percent in 2008 when foreigners pulled more than $13 billion from the stock market. Dealers also watched the dollar's performance overseas for cues. The dollar index <=USD>, a gauge of the U.S. unit's performance against the majors, was down 0.25 percent. The yen fell broadly, shedding initial gains against the dollar on Friday as regional stock markets rose on hopes for a U.S. government programme to subsidise mortgages. [USD/] India's annual wholesale price inflation fell to a more than one year low of 4.39 percent in the last week of January, data showed on Thursday. [ID:nBOM355155] "Reduced inflation pressure also means the central bank will likely cut rates further and become more tolerant of a weaker INR, to create a more accommodative monetary policy environment," Sebastien Barbe and Eric Tsang, strategists at Calyon, wrote in a recent note on the rupee. "However, since India is less vulnerable to ongoing trade shocks than other Asian peers, the rupee is expected to recover to 47 at the end of 2009 and 43 at the end of 2010," they said. (Reporting by Swati Bhat; Editing by Ranjit Gangadharan)

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