Indian shares rose sharply on Thursday, tracking gains in rupee on speculation a protracted U.S government shutdown would further delay the Federal Reserve's plan to start winding down its controversial bond-buying program.
The Indian rupee was last trading firm at Rs.61.77 per dollar versus Tuesday's close of 62.47 as disappointing U.S. private-sector jobs data released overnight, prolonged U.S. budget talks and fears of a bigger showdown over raising the nation's debt ceiling stocked expectations that the Federal Reserve will go slow on tapering, a move that will help sustain large capital flows to emerging markets. The U.S. dollar slid to its weakest level in eight months versus the euro.
Investors also cheered a major political victory for Italian Prime Minister Enrico Letta's government in a no confidence vote and positive economic data out of China, which showed that activity in China's service sector expanded at its fastest pace in six months in September.
The benchmark 30-share Sensex soared 385 points or 1.97 percent to 19,902, with 27 of its components advancing. The broader Nifty index jumped 130 points or 2.24 percent to 5.910.
Banks rose across the board on expectations they will benefit from falling government bond yields. ICICI Bank, Union Bank of India, Canara Bank, HDFC Bank, Bank of India, Yes Bank and Axis Bank climbed 3-6 percent.
Bajaj Auto soared almost 5 percent as the two-wheeler manufacturer reported a modest 2 percent rise in September sales. Tata Motors rallied 3.3 percent, Maruti Suzuki advanced 2.6 percent and Hero MotoCorp rose 1.4 percent.
TCS jumped 3.9 percent on brokerage upgrades and as the software services firm partnered New York Road Runners for the New York City marathon. Infosys closed 0.8 percent higher on signing a multi-year contract with Toyota Motor Europe. Wipro added 2.4 percent, HCL Technologies rallied 3.3 percent and Tech Mahindra gained 3.7 percent. Mindtree rose 4.3 percent after appointing former Infosys chief marketing officer Paul Gottsegen as its senior vice president.
Metal stocks like Jindal Steel, Tata Steel, Hindalco, SAIL and SesaGoa climbed 4-7 percent on the back of upbeat service sector data out of China. Jet Airways soared 4.5 percent on speculation the Cabinet Committee of Economic Affairs will approve the Jet-Etihad deal later in the day. Steel Strips Wheels jumped 10 percent on reporting its highest ever monthly sales in September.
Tata Communications closed 5.2 percent higher, extending Tuesday's nearly 8 percent rally, after South Africa's Vodacom Group said it was in exclusive talks to buy the former's unlisted local unit, Neotel. Zensar Technologies gained 4.2 percent on winning new orders. Ranbaxy Laboratories rose 2.7 percent, extending gains for the second consecutive session.
MOIL added 1.7 percent on price hike buzz. Coal India rose 1.4 percent after releasing production figures for September. MCX was locked at the 5 percent upper circuit limit. The commodity bourse said that it has diluted its stake to 3.4 percent from the existing 5 percent in the Dubai Gold and Commodities Exchange (DGCX) following a rights issue made by DGCX. Bharti Airtel ended largely unchanged after a telecom panel reportedly questioned sector regulator TRAI's proposal to cut spectrum auction floor prices. Fortis Healthcare shed 0.9 percent after its group CEO Vishal Bali resigned to pursue his own entrepreneurial venture. FMCG stocks Hindustan Unilever and ITC lost 1-2 percent.
