Infy leads Sensex surge

Anantharaman Muralikumar

MUMBAI: Indian shares shrugged off fresh declines in the rupee and rallied to

a strong finish on Tuesday, powered by a 16 per cent jump in software leader and

stock market favorite Infosys Technologies Ltd.

Equity analysts said shares could see further gains as foreign funds seemed

to be resuming purchases and the market had learnt to live with a lower rupee.

"Whenever the rupee has depreciated in the last few years, investors

pull out initially but this is followed by a strong rally. We are seeing that

repeated," said chief dealer at local brokerage DT Gandhi, Kuntal Shah.

The benchmark 30-share Bombay Stock Exchange index closed 2.76 per cent or

115.97 points higher at 4,317.22.

The rupee ended at a new closing low of 45.73/74 against the dollar compared

to its previous close of 45.55/56. It has fallen over 2.25 per cent against the

dollar since July 1.

Infosys, which with about 17 per cent has the second highest weighting in the

index, closed up Rs 1,005 at Rs 7,505. It accounted for about 113 points of the

index's rise.

Volumes in the stock were higher than usual at nearly 2.5 million shares on

the Bombay and National exchanges.

In the broader market, advancing issues outnumbered decliners 629 to 529

while total traded volume was higher at nearly 85 million shares compared to

64.5 million on Monday.

Sector analysts said software shares were looking attractive after falling

sharply in the past few weeks.

Infosys lost 26 per cent in the four weeks till August 4 and Satyam Computer

Services dived 33 per cent while the main Bombay index dipped nearly 15 per

cent.

Dealers said foreign funds were big buyers in Infosys on Tuesday, adding that

the rupee's fall would benefit Indian software firms as a majority of their

revenue comes from exports.

Foreign funds have been net equity buyers of $51.6 million in the three

trading days to August 7 after being net sellers of nearly $550 million in June

and July.

"The panic over the rupee's decline has subsided. The rally may spread

to second-rung software shares in the next few days," said Motilal Oswal

Securities dealer Vijay Bhatia.

Besides Infosys, other software sector gainers included Satyam up 10.02 per

cent at Rs 472.35, SSI Ltd. up 10.10 per cent at Rs 2,136.20, Wipro Ltd. up 9.18

per cent at Rs 2,413.85 and DSQ Software up 9.93 per cent at Rs 560.80.

Consumer products firms were leading losers after sharp recent gains with ITC

Ltd. down 0.8 per cent at Rs 773.30, Nestle India down 2.55 per cent at Rs

476.10 and Hindustan Lever Ltd. down 1.63 per cent at Rs 250.30.

(C) Reuters Limited 2000.