Mumbai: Markets jumped as much as 1.3% in morning trade on Tuesday led by gains in export-driven software firms, after the rupee plunged to a two-year low boosting their earnings outlook and helping investors shrug off weak global cues.
At 11:28am, the 30-share BSE benchmark index was up 0.98% at 16,909.26 points, with 25 of its components gaining.
Infosys Ltd , the second-largest software services exporter in India’s flagship $76 billion software services industry, jumped 2.39%, the sector leader Tata Consultancy Services rose 1.91%, while smaller rival Wipro jumped 1.98%.
The United States is the largest market for the Indian technology firms, accounting for about half of the industry’s revenue.
The rupee weakened to its weakest level in two years as worries over Europe’s debt crisis deepened after Standard & Poor’s cut Italy’s unsolicited ratings by one notch to A/A-1 and kept its outlook on negative, warning of a deteriorating growth outlook and damaging political uncertainty.
“The overall trend in the market is negative. It is quite surprising to see this kind of a strength in the market which is coming in from the weakness in the currency,” said Jigar Shah, senior vice president at KIM ENG Securities.
Global markets have been haunted since late July by the twin concerns of euro zone debt troubles and faltering US growth.
Asian stocks and the euro fell on Tuesday after S&P downgraded Italy and as Greece held talks with creditors to avoid running out of cash within weeks, amid worries that Europe’s debt woes will pitch the global financial system into a full-blown banking crisis.
“The market will watch out for further cues from a two-day meeting of the U.S. Federal Reserve that ends on Wednesday,” said Vaibhav Sanghavi, director at Ambit Capital.
Tata Motors rose over 2%, 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.
Mahindra & Mahindra added 1.93% after Ssangyong Motor Co , in which Mahindra is a majority shareholder, said it aims to expand vehicle sales volume and revenue by a third in 2013.
Lenders also rose with top private lender ICICI Bank gaining 1.41% while top state-run lender State Bank of India added 1%.
The broader 50-share NSE index was up 1.07% at 5,085.9 points.
The MSCI’s measure of Asian markets other than Japan was down 2.47%.
Everonn Education , a learning solutions provider jumped 5% after its board for approved a 2.62-million share preferential share issue for Rs 138 crore ($28.7 million) to Varkey Group Ltd, making the latter a co-founder and triggering an open offer.
Areva T&D India rose 3.8% after the firm said it had won a contract to build 765 KV extra high voltage substations.
EID Parry India rose 2.4% after the firm said it would raise stake in US Nutraceuticals LLC to 100% from 51%.