ET:Sensex rises 2.1%; techs lead gains on weak rupee
MUMBAI: Indian shares closed 2.1 per cent higher on Tuesday propelled by export-driven software services firms that jumped 2-4 per cent on higher dollar revenue prospects as the rupee fell to a two-year low, while a short-covering rally in European shares also aided.
India's flagship $76 billion software services industry gets about half its revenues from the United States, the largest market for technology firms.
The main 30-share BSE index ended up 353.93 points at 17,099.28, with 28 of its components closing in the green. Indian shares, which fell on Monday, had logged their third straight weekly gain last week, snapping a five-week-long losing streak .
India's software services sector leader Tata Consultancy Services rose 3.9 per cent, No. 2 Infosys added 3.1 per cent, while smaller rival Wipro jumped 2.9 per cent.
"The weakness in the rupee has helped the markets today, but the outlook will depend on the news flow from the global markets such as the FOMC meeting and the Greece deadline," said Neeraj Dewan, director at Quantum Securities.
The market will watch out for cues from a two-day meeting of the US Federal Reserve that ends on Wednesday, analysts said.
European shares rose on Tuesday in a short-covering rally following the previous session's sharp losses, but traders said that the gains could be short-lived after a surprise downgrade of Italy's credit rating by Standard & Poor's, which showed that euro zone debt issues had not gone away.
The Indian rupee pulled back from the two-year low touched earlier on Tuesday, comforted by gains in local equities and a rebound in the euro.
Global markets have been haunted since late July by the twin concerns of euro zone debt troubles and faltering US growth.
Index heavyweight Reliance Industries gained 3.68 per cent, shrugging off a report in the Mint newspaper which said India's federal investigative agency is considering filing a case against it over alleged favoured treatment for its operations of gas blocks in the KG basin.
Tata Motors rose as much as 3.2 per cent, after its luxury car unit Jaguar Land Rover said it will invest 355 million pounds ($561 million) on a new engine plant in central England.
