By Anil Varma Sept. 17 (Bloomberg) -- India’s rupee advanced to a five- week high as foreign investors added to holdings of local assets amid signs economic recovery is quickening. The currency appreciated 1.7 percent this month as overseas funds bought more Indian shares than they sold for the seventh straight day through Sept. 15, the longest stretch of inflows since July. The Bombay Stock Exchange’s Sensitive Index gained 74 percent this year as growth in Asia’s third-largest economy accelerated last quarter for the first time since 2007. “There is an improvement in the fundamental picture of the Indian economy and this is underscored by the return of foreign investors to the stock market,” said Priyanka Chakravarty, a currency strategist at Standard Chartered Plc in Mumbai. “We remain sanguine about capital flows and expect the rupee to move higher on India’s improving external balance.” The rupee strengthened 0.4 percent to 48.035 per dollar as of 10 a.m. in Mumbai, according to data compiled by Bloomberg. It earlier reached 47.95, the strongest level since Aug. 11. Offshore contracts indicate bets the rupee will trade at 47.99 to the dollar in a month, compared with expectations of 48.26 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. Overseas investors bought a net $8.95 billion of Indian equities this year through Sept. 15, according to the Securities and Exchange Board of India.

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