By Anoop Agrawal Jan. 4 (Bloomberg) -- India’s rupee rose, extending last year’s gains, on speculation an improving economy will bolster global demand for the nation’s stocks. Overseas investors purchased $17.5 billion of stocks in 2009, contributing to a 4.5 percent advance in the rupee and an 81 percent rally in the Bombay Stock Exchange’s Sensitive Index. Finance Minister Pranab Mukherjee last month forecast growth of as much as 8 percent for the fiscal year ending March 31, more than the central bank’s 6 percent projection. “The fundamentals at present are strong and make the rupee an attractive investment,” said Sudarshan Bhatt, chief currency trader at state-owned Corporation Bank in Mumbai. “I expect the rupee’s advance to accelerate.” The rupee climbed 0.3 percent to 46.491 per dollar as of 10:03 a.m. in Mumbai, according to data compiled by Bloomberg. It will strengthen 5.7 percent to 44 this year, according to the median estimate of analysts surveyed by Bloomberg. Offshore contracts indicate bets the rupee will trade at 46.46 per dollar in a month, compared with expectations of 46.66 on Jan. 1. 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. To contact the reporter on this story: Anoop Agrawal in Mumbai at aagrawal8@bloomberg.net.

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