Indian shares wiped out some of the previous day's losses to end firmer on Thursday as foreign investors kept pumping money into Asia's fourth-largest economy, pushing the rupee to a one-month high. The benchmark 30-share Mumbai index ended 0.22 percent higher at 6,907.65 points, back within range of an all-time high of 6,954.86 points hit on Wednesday.
"The market is taking a breather after running up a bit, but is still strong. There are no sellers and with every little dip you have fresh buying," said Falguni Nayar, a director with Kotak Securities. "Foreign funds interest is still good," she added.
Overseas portfolio investors have moved more than $3 billion into stocks this year, more than a third of the record $8.5 billion for all of 2004, as they expect annual economic growth of 7 percent to boost corporate earnings.
Reliance Industries Ltd, with the second-heaviest weight in the index at 11.4 percent, rose 1.1 percent to 593.95 rupees after newspapers said negotiations had begun to resolve a feud between the Ambani brothers who run it. Analysts expect the stock to climb over 600 rupees when the dispute is settled.
State Bank of India, the country's biggest commercial bank, jumped 3 percent as stable interest rates and strong loan growth looked likely to boost earnings.
Bonds extended losses as US Treasury yields spiked higher and oil prices above $54 a barrel rekindled inflation concerns.
The yield on India's 10-year benchmark bond rose to finish at 6.5743 percent, up from Wednesday's 6.5450 percent.
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