India rupee rises to near 2-wk high as stocks gain

* Rupee hits high of 46.7350/dlr; strongest since Oct. 26

* Main share index ends 0.6 pct higher

* Dollar's losses also lifts sentiment (Updates to close)

By Anurag Joshi

MUMBAI, Nov 6 (Reuters) - The Indian rupee rose to its strongest in nearly two weeks on Friday as gains in the stock market strengthened expectations of capital inflows and the dollar's losses overseas lifted sentiment.

The partially convertible rupee INR=IN ended at 46.81/82 per dollar, off a peak of 46.7350 which was its highest since Oct. 26, and about 0.4 percent stronger than Thursday's close of 47.0150/0250. "The market expects more reforms from the government after it decided to offload stakes in public sector companies. That should aid the rupee in the near-term," said a dealer with a foreign bank.

India on Thursday mandated more sales of shares by state-run firms and changed the rules on how it can use the proceeds, as it seeks to boost revenues and rein in a widening budget deficit. [ID:nDEL13395]

The main share index .BSESN climbed 0.6 percent on Friday, and helped post their first weekly rise in three weeks. [.BO]

Foreign funds have so far this year purchased a net $14.2 billion worth of Indian shares, helping the rupee recover from a record low of 52.2 in early March. Last year, they had sold more than a net $13 billion, pushing the rupee down by a fifth.