Indian shares climbed 0.7 percent on Tuesday, stretching gains for a third day, as European and Asian markets saw some respite but the outlook remained clouded by uncertainties. 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 percent, a Reuters poll showed. The data is due on Friday. The 30-share BSE index closed up 0.67 percent, 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 February 26. Foreign funds have pulled out $1.7 billion over the past 10 sessions, pushing the main index down 8 percent this year.
In 2009, the benchmark had jumped 81 percent 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. Infosys rose 2.9 percent and Tata Consultancy Services and Wipro climbed 1.4 percent and 2.5 percent respectively.
Infosys is down 5.2 percent so far in 2010, while Wipro and TCS have lost nearly 4 and 2.1 percent respectively. Top mobile operator Bharti Airtel extended Monday's rise, adding 1.8 percent to 313.80 rupees as investors chased beaten down sectors.
Banks rose on positive long-term outlook. Private-sector lenders ICICI Bank and HDFC Bank climbed 0.7 percent and 0.3 percent respectively. Top lender State Bank of India rose 0.8 percent. 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 50-share NSE index closed 0.7 percent higher at 4,792.65.