Mumbai: Indian shares rose 2.1% on bargain hunting on Tuesday after slipping more than 3.5% in early dealings following rejection by US lawmakers of a financial bailout plan.
The BSE benchmark 30-share Sensex index rose 264.68 points or 2.1% to 12,860.43, snapping three consecutive days of losses.
The Sensex fell 3.5% to a day’s low of 12,153.55 within minutes of opening but recovered in late afternoon trade on local fund bargain hunting in line with other global markets.
Dealers said investors however remained cautious, awaiting further news of the US government’s strategy to solve its financial crisis.
“Local funds pulled the markets up. Global financial turmoil aside, the possibility of lower earnings growth and an economic slowdown are concerns,” said R. Balakrishnan, executive director at Centrum Broking.
Banking and property stocks recovered after the local market regulator said on Tuesday that the US financial crisis would not impact India in a major way.