Wiping off initial losses, the BSE benchmark Sensex today surged by nearly 161 points to a two-week high of 19,413.54 as shares of Infosys and Tata Consultancy Services climbed to record high levels on optimism the US will soon be back on growth track.
After a lower start, the Sensex spurted by 160.93 points, or 0.84 per cent to 19,413.54. The gauge has now gained 536 points in three sessions.
The broad-based National Stock Exchange index Nifty rose by 44.70 points, or 0.77 per cent to 5,863.30, after opening lower at 5,801.30.
Infosys surged 1.29 per cent to Rs 3,004.75, its highest level after March, 2011 and Tata Consultancy Services, the largest software exporter closed at a new high by adding 2.10 per cent to end Rs 1,590.45.
Engineering major L&T shot up by 2.08 per cent to Rs 1,463.45, continuing its rise after CLSA Asia-Pacific Markets upgraded rating on the counter today. Goldman Sachs had upgraded the stock on Monday.
Brokers said besides momentum in interest-rate sensitive stocks ahead of the RBI's policy review this month on hopes of a rate cut, stocks of software companies surged on hopes of a recovery in the US growth and a better Europan trend before central bank policy meetings in the region.
Indian software companies get over 50 per cent of their revenues from the US and European markets.
Traders said the Dow Jones Industrial Average hit a new high yesterday as the US service industry grew at the fastest pace in a year amid optimism the Federal Reserve will maintain stimulus measures to support the economy.
In 30-BSE index components, 20 stocks climbed while 10 ended lower. The realty sector index gained the most by 1.68 per cent to 2,069.08, followed by IT index by 1.66 per cent to 7,059.60. The capital goods index rose by 1.59 per cent to 9,676.88 and banking index by 0.86 per cent to 13,733.93.