MUMBAI, Jan 4 (Reuters) - The Indian rupee extended its rise and continued to trade at its highest level in a month on Monday afternoon on the back of the dollar's fall against major currencies and tracking gains in the domestic sharemarket. * At 3:45 p.m., the partially convertible rupee INR=IN was at 46.295/305 per dollar, its highest since Dec. 4, and above its close of 46.61/62 on Friday. * The index of the dollar .DXY against six majors was down 0.44 percent, helping the rupee further. * One-month offshore non-deliverable forwards contract INR1MNDFOR= were quoted at 46.27/37, little stronger than the onshore spot rate. * Some investors were buying dollars in the offshore market, where it was cheaper, and selling it onshore to arbitrage the price differential, helping the rupee in the spot market. * Indian shares .BSESN closed up 0.54 percent with auto makers leading the gains after posting strong sales in December and helped the rupee, dealers said. [.BO] * In 2009, foreign portfolio buying of more than $17 billion of domestic stocks helped the rupee rise 12.2 percent from a record low of 52.2 hit in early March. It gained 4.7 percent last year. * In the currency futures market INRFUTURES, the most traded near-month contracts on the National Stock Exchange and MCX-SX were both quoting at 46.36 respectively, with the total traded volume on the two exchanges at a high $5.1 billion. (Reporting by Swati Bhat; Editing by Sunil Nair)

Source