July 27 (Bloomberg) -- India’s rupee climbed to a three- week high as rising company earnings prompted foreign funds to increase their local stock holdings.
The currency rose for a third day after ICICI Bank Ltd., India’s second-largest lender, said July 25 that profit climbed 21 percent last quarter. The benchmark Bombay Stock Exchange Sensitive Index has jumped 15 percent in the past two weeks, extending this year’s advance to 60 percent, as the nation’s top three software exporters, the biggest drugmaker and No. 1 mobile-phone operator reported incomes that beat estimates.
“The rupee is stronger as corporate earnings look good,” said Roy Paul, the Mumbai-based assistant manager of treasury at Federal Bank Ltd. “The equity market is expected to perform better as investment flows increase.”
The rupee gained as much as 0.3 percent to 48.095 a dollar, its strongest level since July 6, before trading at 48.14 as of 10 a.m. in Mumbai, according to data compiled by Bloomberg. It climbed 1.1 percent last week, the most since the five-day period ended May 22.
ICICI’s net income rose to 8.78 billion rupees ($182.3 million) in the three months to June 30 from a year earlier, the lender said, surpassing the median 7.4 billion rupees estimated by analysts in a Bloomberg News survey.
Overseas investors bought more Indian shares than they sold in each of the last nine trading days, the longest stretch in two months, according to data provided by the Securities and Exchange Board of India. Net purchases for the year reached $6.5 billion, doubling from the same period in 2008.
Offshore contracts indicate bets the rupee will trade at 48.16 to the dollar in a month, compared with expectations for a rate of 48.27 at the end of last week. 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 rupee may trade between 48.00 and 48.25 to the dollar today, Federal Bank’s Paul said.
Source : Bloomberg.com