Indian shares gained 1.92 percent Tuesday on expectations of an economic stimulus package to be announced by the government, dealers said. The benchmark 30-share Sensex index rose 182.64 points to 9,716.16, gaining for the second day after several days of losses.
"These days the market is being determined more by sentiment rather than fundamentals, so uncertainty will continue for some time," said Hitesh Agrawal, head of research with Angel Broking. The government is expected to unveil a second stimulus package soon, after it announced an extra four billion dollars in spending to boost the economy earlier this month.
"It is the quantum of the stimulus package that will make a real difference," Agrawal said. Economists said the central Reserve Bank of India (RBI) is expected to lower interest rates at its next scheduled monetary policy meeting, on January 27. Realty and automobile companies led the gains.
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