The BSE Sensex climbed 0.7 per cent on Tuesday, stretching gains for a third day, as European and Asian markets saw some respite but the outlook remained clouded by uncertainties.
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Export-focused outsourcers such as bellwether Infosys Technologies, bigger rival Tata Consultancy Services and No. 3 Wipro led the rise on a view their recent fall was overdone.
India's economy is picking up momentum and industrial output in December is expected to have climbed an annual 12 per cent, a Reuters poll showed. The data is due on Friday.
The 30-share BSE index closed up 0.67 per cent, or 106.57 points, at 16,042.18, after seesawing in early trade. Nineteen of its components advanced.
"The market should be rangebound over the next few weeks," said Sandip Sabharwal, CEO of portfolio management services at Prabhudas Lilladher, with investors wary ahead of the federal budget on Feb. 26.
Foreign funds have pulled out $1.7 billion over the past 10 sessions, pushing the main index down 8 per cent this year.
In 2009, the benchmark had jumped 81 per cent when foreigners had bought shares worth $17.5 billion.
"The biggest risk in India is the dependence on foreign capital to fund external deficits," Stephen Roach, chairman of Morgan Stanley Asia, told reporters in Mumbai.
"It is certainly going to be a tougher market climate this year as investors come to grips with some of the more normal after-shocks of the financial crisis," he said, after the big surge in Asian equities last year.
Infosys rose 2.9 per cent and Tata Consultancy Services and Wipro climbed 1.4 per cent and 2.5 per cent respectively.
Infosys is down 5.2 per cent so far in 2010, while Wipro and
TCS have lost nearly 4 and 2.1 per cent respectively.
"We reiterate our positive stance on the three Tier-I companies (Infosys, Wipro and TCS) and see the recent fall in stock prices as an opportunity to buy these names," Kotak Securities said in a note.
"We also find the street's concerns on valuations and potential negative impact of recent political news flow in the U.S. a bit overdone," it said.
Top mobile operator Bharti Airtel extended Monday's rise, adding 1.8 per cent to Rs 313.80 as investors chased beaten down sectors.
Banks rose on positive long-term outlook. Private-sector lenders ICICI Bank and HDFC Bank climbed 0.7 per cent and 0.3 per cent respectively.
Top lender State Bank of India rose 0.8 per cent.
Non-ferrous metals producer Sterlite Industries rose 0.7 per cent to Rs 757.55, as copper prices climbed 1 per cent.
In the broader market, gainers outpaced losers in a ratio of 1.2:1 on volume of 341 million shares, less than last week's daily average of 394 million shares.
The FTSEurofirst 300 index of top European shares was up 0.2 per cent by 1016 GMT while MSCI's measure of Asian markets other than Japan rose nearly 1 per cent.
The 50-share NSE index closed 0.7 per cent higher at 4,792.65.
STOCKS THAT MOVED
& Larsen & Toubro rose 1.2 per cent to Rs 1,462.25, as the engineering and construction firm said it had won orders worth $125 million.
& Jet Airways rose 2.4 per cent to Rs 485.05, after the Mint newspaper reported the largest Indian private carrier was in initial talks with FedEx Corp to launch a dedicated cargo airline.
& Strides Arcolab climbed 13.3 per cent to Rs 310.50 as the drug maker said it had received U.S. Food and Drug Administration nod for its generic hypertension drug.
MAIN TOP 3 BY VOLUME
& Jubilant FoodWorks on 14 million shares
& Unitech on 7.6 million shares
& Shree Ashtavinayak on 6.7 million shares
