By Anoop Agrawal July 24 (Bloomberg) -- India’s rupee was poised for its biggest weekly gain in two months as foreign funds stepped up purchases of local shares on optimism a rebound in the global economy will boost companies’ earnings. The rupee has appreciated 1.3 percent in the past two weeks, the third-best performance among the 10 most-active currencies in Asia outside Japan, as overseas investors bought $642 million more Indian shares than they sold in the eight days through July 22. The Bombay Stock Exchange Sensitive Index, or Sensex, has jumped 13 percent since July 10 as companies including Tata Consultancy Services Ltd. and Wipro Ltd. reported better-than-forecast earnings. “The rupee’s movement is mirroring the trend in equity markets, which is driven by economic fundamentals,” said Arun Nagarajan, a currency trader at Kotak Mahindra Bank in Mumbai. “The rupee has scope to extend gains.” The rupee advanced 0.7 percent this week to 48.385 per dollar as of 11:19 a.m. in Mumbai, according to data compiled by Bloomberg. South Korea’s economy last quarter expanded 2.3 percent from the previous three months, the fastest pace since 2003, a central bank report showed today. Sales of existing homes in the U.S. rose in June for a third consecutive month, reaching the highest level since October, signaling the four-year slump that precipitated the financial crisis is ending. Emerging-market equity funds drew $2.6 billion in the week ended July 22, the most since the period ended June 10, with those in Asia excluding Japan taking in $973 million, according to research firm EPFR Global, which tracks $10 trillion in assets. Foreign funds have bought a net $6.3 billion of Indian stocks this year, according to data provided by the Securities & Exchange Board of India. To contact the reporter on this story: Anoop Agrawal in Mumbai at aagrawal8@bloomberg.net.

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