By Swati Bhat and Himank Sharma
MUMBAI (Reuters) - The rupee rose on Thursday after Reuters reported the government was in talks to include Indian debt in global bond indexes, a move that could boost dollar inflows into the country.
India is talking with JP Morgan and others to gain entry to benchmark indexes for emerging market debt in hopes of attracting billions of dollars in investment and may ease some restrictions on foreign inflows in order to do so, sources told Reuters on Thursday.
Inclusion in popular government bond indexes could attract $20 billion-$40 billion in additional flows into India over a year, Standard Chartered Bank wrote in a report last month.
"It (the rupee) has not broken the 61.40 resistance, and gained from the news about addition of Indian bonds in global indices," said Naveen Raghuvanshi, associate VP at Development Credit Bank.
"We are seeing the rupee finding immediate support at 60.50 in the short-term and the upside could be restricted to 62.50."
The partially convertible rupee closed at 61.39/40 per dollar compared with 61.93/94 on Wednesday. The unit moved in wide range of 61.32 to 62.285 during the session.
Domestic shares closed up 0.12 percent on gains in blue chips such as Tata Motors Ltd (TAMO.NS) and Infosys Ltd (INFY.NS).
Traders are awaiting the factory output data due after market hours on Friday for more near-term direction.
In the offshore non-deliverable forwards, the one-month contract was at 62.47, while the three-month was at 63.47.
In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange and the MCX-SX closed at around 61.51 with a total traded volume of $2.26 billion. (Editing by Subhranshu Sahu)