MUMBAI: The Sensex shrugged off weak Asian markets and a shaky start to rise 1.6 percent on Tuesday, as longer-term investors took advantage of a 2.9 percent drop in the previous session to enter the market.
Gains in outsourcer Infosys Technologies, diversified cigarette maker ITC and energy giant Reliance Industries pulled the main index higher after it fell as much as 1 percent in early deals.
Satyam Computer Services rose 10 percent to its daily maximum limit after reporting financial results for the first time since being rocked by an accounting scandal and subsequently taken over by Tech Mahindra Ltd.
By 11:47 a.m. (0617 GMT), the 30-share BSE index was up 1.6 percent at 14,901.85 points, with 25 stocks advancing.
The benchmark suffered its biggest drop in almost six weeks on Monday as investors took profits after a near 90 percent rally over the past three months.
"Yesterday's fall was very sharp. It was surprising because we were worse off than the rest of the world," Arun Kejriwal, a strategist at research firm KRIS, said.
"We could continue to firm up for the next few days before another correction."
Analysts said profit-taking would be sporadic as underlying sentiment was positive, with expectations the economy was set to revive later in the year and hopes the government will unveil market-friendly measures in the budget in early July to boost growth.
"The money that is lying on the sidelines is coming in whenever there is a correction. This will continue in the near-term," said Ambareesh Baliga, vice president at Karvy Stock Broking.
Satyam, once India's no. 4 outsourcer, rose 6.05 rupees to 66.85 rupees, while Tech Mahindra, which owns a controlling stake in Satyam, jumped 12.3 percent to 666 rupees.
No. 2 outsourcer Infosys, which gets most of its revenue from overseas, gained 3.3 percent to 1,790.25 rupees as the rupee came under pressure after the dollar climbed against major currencies.
Top IT-services firm Tata Consultancy climbed 4.2 percent to 769 rupees.
Reliance Industries, which has the most weight in the main index, advanced 1.3 percent to 2,218 rupees, while ITC rose 2.9 percent to 189.25 rupees.
In the broader section, losers led gainers 2 to 1 on relatively heavy volume of 225.9 million shares.
The 50-share NSE index was up 1.1 percent at 4,478.20.
Most other Asian markets fell on Tuesday, with Japan's Nikkei down 0.8 percent, while MSCI's measure of other Asian markets fell 1.3 percent.
MAIN TOP 3 BY VOLUME
* Satyam Computer on 14 million shares
* Tata Steel on 12.7 million shares
* Unitech on 12.2 million shares
STOCKS ON THE MOVE
* Areva T&D rose 2.8 percent to 349 rupees after the company said late on Monday it won four orders worth about 3.5 billion rupees from Power Grid Corp.
Dish TV India Ltd fell 4 percent to 43.10 rupees a day after its founders sold 5.8 percent in the company at a discount of nearly 9 percent to Friday's closing price.
