Indian stocks advanced, with the benchmark index climbing to a record, after the rupee climbed to an eight-month high as foreign investors extended Asia’s largest equity-market inflows.

Maruti Suzuki India Ltd. (MSIL) rallied to an all-time high. Tata Steel Ltd. (TATA) headed for a five-week high. Power-equipment maker Bharat Heavy Electricals Ltd. (BHEL) rose to its highest level in nine months. The rupee strengthened for a fourth day.

The S&P BSE Sensex (SENSEX) gained 0.5 percent to 22,159.92 at 9:48 a.m. in Mumbai. The currency has risen 2.5 percent this month, the most among major Asian currencies, as global funds plowed a net $ 3.5 billion into local shares and debt since March 1 amid easing inflation and forecasts for quickening growth, and ahead of national elections starting next month.

“We hadn’t expected the amount of money that has flowed in and that’s why the rupee is strengthening,” R. Sreesankar, head of institutional equities at Prabhudas Lilladher Pvt. in Mumbai, said on Bloomberg TV India today. “There’s expectation of a stable and decisive government after the elections.”

The opposition Bharatiya Janata Party, favored by investors seeking a change to revive the economy, is leading in opinion polls as voters punish Prime Minister Manmohan Singh’s Congress party for corruption scandals and the slowest economic growth in a decade. Congress is headed for its worst-ever electoral performance, polls show.

Overseas funds bought a net $ 265 million of shares on March 24, data compiled by Bloomberg show. That extended this year’s inflows to $ 2.84 billion, the highest among eight Asian markets tracked by Bloomberg.

The Sensex has increased 4.6 percent this year, the best performer among the four largest emerging markets including China, Russia and Brazil. It’s valued at 14.1 times projected 12-month earnings, compared with the average multiple of 14.5 over the past five years. The MSCI Emerging Markets Index trades at 9.1 times.

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To contact the editors responsible for this story: Michael Patterson at Ravil Shirodkar, Phani Varahabhotla