Indian (SENSEX) equities advanced, with the benchmark index poised to end three days of declines, as the rupee headed for its biggest two-day gain in almost four months.

Maruti Suzuki India Ltd. (MSIL) jumped the most in three months and Tata Motors Ltd. (TTMT), owner of Jaguar Land Rover, rose for a second day. Sun Pharmaceutical Industries Ltd. (SUNP), India’s most valuable drugmaker, had the biggest increase in two months.

The S&P BSE Sensex added 0.4 percent to 20,762.49 at 11:56 a.m. in Mumbai, paring a monthly loss to 1.9 percent. Turkey joined India in raising borrowing costs yesterday to stem a slide in emerging market currencies and a selloff in stocks. The Federal Open Market Committee concludes a two-day meeting today, when it will cut monthly bond purchases by a further $ 10 billion, a Bloomberg survey showed. The Fed’s stimulus spurred foreigners to pour $ 20 billion into Indian shares in 2013, the most in Asia after Japan, data compiled by Bloomberg show.

“The rupee’s rise and the three-day fall is giving some comfort,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd., said from Kollam in south India. “The Fed meeting will be keenly watched as it has a great impact on fund flows to India and other emerging markets.”

The Sensex declined to a six-week low yesterday while the rupee rose from a two-month low after the Reserve Bank of India unexpectedly increased the policy rate by a quarter-point to 8 percent to curb price pressures. Governor Raghuram Rajan said in yesterday’s statement that more increases are unlikely in the “near term” should inflation cool as expected.

Maruti, Larsen

Maruti Suzuki rallied 6.4 percent, ending a four-day, 13 percent slide. Macquarie Group Ltd. raised its recommendation on the stock to outperform from neutral and lifted the price target 15 percent to 1,800 rupees. The stock’s 8 percent drop yesterday was overdone, analysts Amit Mishra and Aashi Kashyap wrote in a note to investors.

Tata Motors added 1.1 percent to 359.9 rupees. The S&P BSE Auto index gained 1.3 percent, the most since Dec. 20.

Sun Pharmaceutical surged 3.6 percent, the most since Dec. 2, to 602.60 rupees. Engineering company Larsen & Toubro Ltd. (LT) added 1.3 percent to 996.6 rupees.

The rupee strengthened 0.6 percent to 62.1750 per dollar, taking the two-day gain to 1.5 percent, the most since Oct. 4.

The Sensex climbed 9 percent in 2013, the best annual gain among the four largest emerging markets, and trades at 13 times projected 12-month earnings. The MSCI Emerging Markets Index trades at 9.2 times. Global investors sold a net $ 208 million of local shares on Jan. 27, data compiled by Bloomberg show.

The CNX Nifty Index rose 0.6 percent to 6,161.90. The India VIX fell 2.9 percent.

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