Indian rupee hits six-month high as foreign investors return to equities

The Indian rupee hit a six-month high of 94.04 against the US dollar on Friday, driven by foreign investors returning to Indian equities amid a global shift away from AI-heavy markets. This marks one of Asia's best-performing currencies. Foreign investors bought nearly $3 billion in Indian equities this week, including $1.6 billion on Thursday, the largest single-day purchase in nearly six years. The move follows a 5.5% plunge in the Nasdaq on Thursday, as concerns over high valuations and AI infrastructure spending sustainability challenge the technology rally. Lower crude oil prices, with Brent falling nearly 20% this week on hopes of an end to the Iran conflict, have also provided relief to India, a major energy importer. The rupee's gains come after sustained foreign withdrawals earlier in 2026, when investors favored AI-linked markets.