India's BSE Sensex rose Tuesday, tracking positive cues from other Asian markets and following recovery staged by the rupee.
The Sensex was up by 117.51 points or 0.73 percent to reach 16105.91. The Indian rupee rose 30 paise to 55.36 a dollar Tuesday.
Japan's Nikkei, Hong Kong's Hang Seng and South Korea's Kospi were trading higher on expectation that policy makers would take measures to boost growth in many countries. There is also focus on Tuesday's emergency teleconference among G7 leaders in which they are expected to put more pressure on European leaders to act.
Market sentiments were positive as China's services activity in May grew at the fastest rate in 19 months, according to the HSBC Purchasing Managers Index (PMI) released Tuesday. The services PMI rose to 54.7 in May compared to 54.1 in April.
In India, investors are expecting a rate cut by the Reserve Bank of India following the comments by its Deputy Governor Subir Gokarn Monday that growth was lower than anticipated and oil prices had come off more than expected, which are two factors suggesting more room for monetary policy. Last week, it was reported that the country's economic growth plunged to 5.3 percent in the fourth quarter ending March 31, which is a nine-year-low.
Also adding to the investor confidence was the comments from Union Finance Minister Pranab Mukherjee Monday that India's situation was nowhere near that in 1991 as the country's fundamentals were very strong. He added that India's foreign exchange reserve was very high in comparison with that in 1991.
Leading the gain in Sensex were stocks of banks and capital goods. Major gainers were Jaiprakash Associates, Reliance Infra, Cairn India and Sterlite Industries whose stocks rose 2.2 percent, 2 percent, 1.9 percent and 1.74 percent respectively. ICICI Bank, HDFC Bank, TCS and Tata Steel were other gainers.
Major losers were Dr Reddy's Labs, ITC and DLF whose shares declined 0.63 percent, 056 percent and 0.55 percent respectively. ONGC, Tata Motors and Bajaj Auto were other losers.