MUMBAI, Jan 20 (Reuters): The BSE Sensex rose on Monday after two days of losses as software services exporters gained after Wipro posted solid earnings and joined domestic rivals in giving a positive outlook for the sector.
Value-buying also boosted recent underperformers, including lenders such as State Bank of India and more defensive stocks such as cigarette maker ITC.
However, broader gains were capped as Reliance Industries fell after its October-December quarterly profit when adjusted for other income was seen lagging expectations.
Investors are also growing hopeful the Reserve Bank of India will keep interest rates on hold at its policy review on January 28, which analysts say could spur additional gains in shares.
"For the markets to sustain, we require a lot of good news from the RBI. The policy review is going to be the biggest trigger for the market in the short term," said Mehraboon Irani, head of private client group at Nirmal Bang Securities.
"All economy-related stocks will continue to disappoint, while defensive sectors like pharma and IT will continue to outperform the broader markets."
The Sensex closed up 0.67 per cent at 21,205.05, while the broader Nifty ended higher 0.68 per cent at 6,303.95.
Foreign institutional investors bought shares worth 753 million rupees on last Friday, exchange data showed. FIIs have been buyers for seven consecutive sessions to the tune of 20.21 billion rupees.
Shares in Wipro gained 3.7 per cent after the company said late last Friday it is eyeing more lucrative financial industry contracts from Europe and the United States to catch up with its bigger rivals and looks to grow its sales by up to 4 per cent this quarter.
Tata Consultancy Services rose 5.7 per cent on value-buying after falling 5.8 per cent on last Friday, the most in a day since October 2011 after its December quarter profit when adjusted for other income, as well as operating margin were seen lagging expectations, said traders.
Banking shares closed higher with State Bank of India gaining 1.3 per cent ahead of the RBI policy review as investors expect the central bank to keep rates unchanged.
ITC also gained 1.7 per cent at 330.20 rupees after falling 0.2 per cent on last Friday on value-buying, said traders.
Shares in Aurobindo Pharma closed up 6.7 per cent at 409.25 rupees after the company said on Saturday that it agreed to buy Actavis Plc's commercial operations in seven Western European countries for about 30 million euros.
Reliance MediaWorks' shares rose 18.7 per cent to 55.15 rupees after the company said its board approved proposed plans of delisting the company.
However, Reliance Industries fell 1.7 per cent after the company's October-December quarter profit, out on Friday, when adjusted for other income, was seen lagging expectations, said dealers.
