Sensex rises 2.1%; IT leads gains

Sensex rises 2.1%; IT leads gains

Mumbai: The BSE Sensex closed 2.1% higher on Tuesday propelled by export-driven software services firms that jumped 2-4% 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 US, 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. The Sensex, which fell on Monday, logged its third straight weekly gain last week, snapping a five-week-long losing streak.

India’s software services sector leader Tata Consultancy Services Ltd (TCS) rose 3.9%, second-largest Infosys Ltd added 3.1%, while smaller rival Wipro Ltd jumped 2.9%.

“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 (Federal Open Market Committee) meeting and the Greece deadline," said Neeraj Dewan, director at Quantum Securities Ltd.

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 and Poor’s, which showed that euro zone debt issues had not gone away.

The rupee pulled back from the two-year low touched earlier on Tuesday, comforted by gains in local equities and a rebound in the euro.

Tata Motors Ltd rose as much as 3.2%, after its luxury car unit Jaguar Land Rover said it will invest £355 million on a new engine plant in central England.

Mahindra and Mahindra Ltd rose as much as 2.45% after Ssangyong Motor Co. Ltd, in which Mahindra is a majority shareholder, said it aims to expand vehicle sales volume and revenue by a third in 2013.

Lenders, which have been battered in the past two months with the BSE banking index plunging 13%, also rose with top private lender ICICI Bank Ltd gaining 2.66% to 882.35, while top state-run lender State Bank of India (SBI) added 3.85% to 1,990.7.

The 50-share National Stock Exchange index closed up 2.15% at 5,140.2 points. In the broader market, there were 2.3 gainers for every losing stock with 537.4 million shares changing hands.

Everonn Education Ltd, a learning solutions provider, closed 5% higher at 367.2 after its board approved a 2.62-million share preferential share issue for 138 crore to Varkey Group Ltd, making the latter a co-founder and triggering an open offer.

Cairn India Ltd rose 4.97% to 305.4 after Goldman Sachs upgraded it to “buy" from “neutral" and revised its net asset value-based target price to 360 from 405.

Subex Ltd, a provider of telecoms software products, jumped 3.8% at 48.75 after it said it has entered into an agreement to sell its activation business to NetCracker Technology Corp.