The Indian rupee strengthened through 50 per dollar to its highest in more than a month on Monday as gains in regional and local share markets boosted hopes of a sustained return of risk appetite of foreign investors. Some of the rupee's strength was contained by dollar demand as the oil price rose on hopes of a the worst had passed for the world economy. At 10:20 a.m. (0450 GMT), the partially convertible was at 49.91/93 per dollar, its strongest since late February and 0.8 percent stronger than Thursday's close of 50.33/35. Markets were closed on Friday for a holiday. "The rupee is underperforming, the dollar-rupee should have been much lower. There is dollar demand from oil companies and some genuine import covering," said Madhusudan Somani, associate director financial markets at Yes Bank. "The rupee could rise to 49.80 levels later in the session," he added. Most Asian units were also higher against the dollar. For a snapshot see [EMRG/FRX]. Indian shares rose nearly 3 percent in opening deals, extending gains into a fourth session and taking the market to its highest levels since early November. "Equities are looking good globally, the recent data from a lot of economies is coming out OK. India is underperforming due to uncertainties of elections," Somani said. One-month offshore non-deliverable forward contracts PNDF were quoting at 49.95/50.00, not much different to the onshore spot rate. Generally the difference between the markets is about 20 paise, and dealers said the narrowing may indicate a shift in sentiment towards the rupee.

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