By Anil Varma Feb. 3 (Bloomberg) -- India’s rupee advanced for a second day on optimism the nation’s accelerating economic growth will attract investors as emerging-market stocks extended gains. The currency climbed to the strongest level in more than a week after reports showed India’s manufacturing output expanded for a 10th straight month and exports rose for a second month. The MSCI Asia-Pacific Index of regional shares gained 0.8 percent, tracking rallies in U.S. and European equities. “Investor confidence in the rupee will be renewed once global risk appetite revives as India’s economic fundamentals remain strong,” said Priyanka Chakravarty, a currency strategist at Standard Chartered Plc in Mumbai. The rupee climbed 0.3 percent to 46.1088 per dollar as of 10:20 a.m. in Mumbai, according to data compiled by Bloomberg. Standard Chartered predicts the currency will appreciate to 42 by year-end, which is more bullish than the 43.5 median estimate of 17 analysts surveyed by Bloomberg News. Offshore contracts indicate bets the rupee will trade at 46.17 to the dollar in a month, compared with expectations of 46.28 yesterday. 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. Improving Economy The Purchasing Managers’ Index compiled by HSBC Holdings Plc and Markit Economics stood at 57.6 last month, compared with 55.6 in December, according to a report released Feb. 1. A reading above 50 signals expansion. Overseas sales rose 9.3 percent in December from a year earlier, after rising for the first time in 2009 the previous month, the government said the same day. The Reserve Bank of India last week raised its forecast for the nation’s economic growth in the financial year ending March 31 to 7.5 percent from 6 percent. To contact the reporters on this story: Anil Varma in Mumbai at avarma3@bloomberg.net.

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