Foreign funds have bought shares worth $2.3 billion so far in March, taking total inflows in 2014 to $2.6 billion.
Custodian banks were offering dollars but good bids came in from state-run banks, pulling the rupee off highs.There is good support for the dollar/rupee at 60.50-60 levels. The range is 60.30 to 61.10 for the pair for the rest of the week.
The partially convertible rupee closed at 60.77/78 per dollar compared with 60.8950/9050 on Friday, marking its strongest close against the dollar since August 1. The unit rose as high as 60.6450 intra-day, its strongest since March 11.
Traders said gains in other Asian units also underpinned sentiment for the rupee after the yuan rebounded from its 13-month low.
In the offshore non-deliverable forwards, the one-month contract was at 61.13, while the three-month was at 61.81.