Indian rupee extends gains as oil holds steady

MUMBAI, July 17 (Reuters) - The partially convertible Indian rupee <INR=IN> extended gains in afternoon trade on Thursday as oil prices steadied near $134 a barrel and also helped by gains in local stocks.

* At 2:30 p.m., the rupee was at 42.87/88 per dollar, stronger than 43.07/08 per dollar at Wednesday's close. It hit a 15-month low of 43.50 earlier this month.

* India's main share index was up more than 3.5 percent after having risen as much 4.2 percent in early deals tracking firm overseas markets. See [.BO]

* Foreign funds have sold a net $7.1 billion of Indian shares so far this year, and have contributed to a more than 8 percent drop in the rupee's value against the dollar. They bought $17.4 billion in 2007 sending the rupee up by more than 12 percent. (Reporting by Swati Bhat; editing by Sunil Nair)