India’s rupee strengthened for a third day on speculation a global stocks rally will damp risk aversion and so revive investment in emerging-market assets. The currency climbed to a five-week high and local shares gained after U.S. home sales rebounded and Treasury Secretary Timothy Geithner said there are “encouraging signs” a global financial crisis is easing. Overseas funds’ equity purchases exceeded sales in March after net sales in February, data from Securities & Exchange Board of India show. “The performance of equity markets across the world suggests investor confidence is returning,” said Sudarshan Bhatt, chief currency trader at state-owned Corporation Bank in Mumbai. “The rupee is drawing strength from that and I think it will continue in the near term.” The rupee advanced 0.6 percent to 50.35 per dollar as of 10:15 a.m. in Mumbai, according to data compiled by Bloomberg. It earlier reached 50, the strongest since Feb. 25, and has rebounded more than 3 percent since reaching a record low of 52.1850 on March 3. The Bombay Stock Exchange’s Sensitive Index of shares jumped 4.2 percent to 10,316.91, headed for its highest close in almost three months, and the MSCI Asia Pacific Index surged 4.5 percent. Offshore contracts indicate traders bet the rupee will trade at 50.7 to the dollar in a month, compared with expectations of 51.01 yesterday. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the local currency. The Group of 20 summit convenes in London today amid signs that the world economy is stabilizing after months of freefall. U.S. President Barack Obama, U.K. Prime Minister Gordon Brown and their G-20 counterparts -- responsible for 85 percent of the world economy -- are gathering to push along an agenda aimed at ending the slump and avoiding a repeat of the financial crisis that caused it.

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