Sensex up 110 pts, Re dips

Shares bounced back on Tuesday, gaining more than 1 per cent, but the rupee fell to 44 per dollar, losing as much as 1 per cent in two trading sessions since yesterday even as crude oil closed at $67.2 per barrel on the Nymex, down from $70 yesterday.

The BSE Sensex climbed 1.45 per cent or 110.57 points to close at 7,745 points, with gainers outsmarting losers by nearly 2 to 1. The broader 50-share S&P CNX Nifty rose 1.3 per cent to 2,367.75.

The rupee opened nine paise lower at 43.98 to a dollar against Monday's close of 43.89 and touched its nine-month low of 44.15 in intra-day trade as importers, mostly oil companies, rushed for covering their dollar demand.

Exporters, on the other hand, were busy cancelling their earlier contracts to re-book the dollar at new levels as they are getting more value for their dollar receivables. The spot rupee closed at 43.02 to a dollar.

According to Pawan Bajaj, chief dealer with Bank of India, the rupee is expected to be seen in the range of 43.90-44.20 during the week. If oil prices went up further, the rupee might even breach the 44.50 level, dealers said.

Dealers pointed out that if the dollar demand persisted, the Reserve Bank of India would have to resort to selling dollars in the market to prevent a cash dollar crisis.

Technology stocks were in the limelight triggered by the weakness in the currency. Tata Consultancy Services, the top software services exporter, added 2.2 per cent to close at Rs 1,384.05; Infosys Technologies gained 2.4 per cent to close at Rs 2,346.55; Wipro rose 2 per cent to Rs 358.45 and Satyam Computer Services gained 4.4 per cent to Rs 522.55.

The other gainers on Tuesday included sugar manufacturer Bajaj Hindustan, which added 6.1 per cent to close at Rs 200.25.

This was after its board approved acquisition of 55 per cent stake in Pratappur Sugar and Industries. Also among the gainers was the State Bank of India, which gained 2.1 per cent to close at Rs 788.85 following its chairman's announcement of plans to acquire a few banks abroad.

Ballarpur Industries rose 2.3 per cent to Rs 117 65 after it announced a price hike of uncoated paper by about 2 per cent per tonne from October 1.