The BSE Sensex rose for a second consecutive session on Wednesday, marking its highest close in almost two weeks, led by IT stocks such as Infosys after recent losses were seen as overdone and on hopes a resolution to the “US cliff” standoff would improve the outlook for the sector.
Shares in non-banking financial companies such as Shriram Transport Finance also rose after a bill laying the groundwork for the issuance of new bank licenses was approved by parliament.
Analysts said with the government reform-driven gains likely to subside as the winter session of parliament ends on Thursday, global risk factors may become more important for domestic markets.
Global shares hit 17-month highs and the euro surged on Wednesday on hopes that US politicians will reach a budget deal and that Japan would implement further monetary stimulus.
“Markets would now pick an excuse from what is happening globally like the US fiscal cliff issue, otherwise there is scope of correction,” said Paras Adenwala, managing director at Capital Portfolio Advisors.
The BSE Sensex rose 0.57 per cent, or 111.25 points, to end at 19,476, marking its highest close in almost two weeks.
The broader Nifty rose 0.56 per cent, or 32.80 points, to end at 5,929.60, closing above the psychologically important 5,900 level.
Shares in Tata Consultancy Services gained 1.8 per cent, as a US budget deal would improve the outlook for a key market for software services exporters.
TCS shares also rose after Morgan Stanley upgraded the stock to ‘overweight’ from ‘equal-weight’, noting IT spending could be stable in fiscal year 2013 and revenues would improve in fiscal 2014.
Technology shares also rose after recent losses were seen as overdone. Infosys ended 1.1 per cent higher after falling 6.8 per cent in December, as of Tuesday’s close
Steel companies gained after China said it would scrap a 40 per cent export duty on metallurgical coke, a steel-making raw material, from next year.
The move is expected to weigh on prices of metallurgical coke, giving steel firms access to cheaper imports from China.
Tata Steel gained 2.4 per cent, while Jindal Steel and Power ended 2.5 per cent higher.
However, among stocks that fell, banks such as Oriental Bank of Commerce lost 2.5 per cent, while Dena Bank ended down 1.6 per cent on profit booking.
ICICI Bank fell 0.9 per cent after earlier hitting its highest level since December 2010, while Axis Bank ended 1.4 per cent down as recent outperformance was seen overdone.
