BENGALURU, July 29 Reuters India39;s bluechip Nifty 50 stock index recorded its best monthly gains since November 2020, while the rupee surged against the dollar on Friday, as investors bet on a slower pace of U.S. interest rate hikes.

The NSE Nifty 50 index closed 1.35 higher at 17,158.25 while the SP BSE Sensex rose 1.25 to 57,570.25, with both indexes settling at their highest in three months.

In July, the Nifty rose 8.7, while the Sensex climbed 8.6, helped by a sharp decline in crude prices that soothed inflation worries. The indexes are up around 2.6 each for the week.

Investor sentiment got a boost after a contraction in the U.S. economy for a second straight quarter raised hopes that the Federal Reserve may not opt for aggressive interest rate hikes.

The focus has now shifted to the Reserve Bank of India39;s policy meet next week, which economists now predict will deliver a smaller rate hike than earlier expected.

The Indian rupee jumped 0.63 to 79.25 per dollar in its best session since August 27, 2021.

The Nifty Metal Index was the best performing stock subindex, rising 3.9 banking on likely strong demand from top consumer China. Tata Steel advanced 7.2.

The Nifty Auto index gained 1.3, with TVS Motor Co up 4.3 after reporting strong profit.

SBI Life Insurance rose 8.6 and was the top gainer in the Nifty on a rise in quarterly profit, while drugmaker Sun Pharma jumped 5.4 after beating profit expectations.

Shares of industrial equipment maker GMM…