MUMBAI--Indian shares ended higher Tuesday, but off a more-than-two-year high hit intraday as investors took profits in software stocks which gained sharply after strong financial results over the past few days.
The Bombay Stock Exchange's 30-stock Sensitive Index rose above the crucial 20,000-point mark as soon as the market opened and in the afternoon session. The index, however, gave up part of the gains and ended the day up 80.41 points, or 0.4%, at 19,986.82.
It hit a high of 20,036.82 just before the session ended. The index last traded above this level on Jan. 7, 2011.
On the National Stock Exchange, the 50-share Nifty ended higher by 32.55 points, or 0.5%, at 6,056.60.
"The overall investor sentiment is bullish, and better-than-expected results in the software and banking sectors are leading to some good buying across industry sectors," said Sandip Sabharwal, a fund manager at Prabhudas Lilladher, a local brokerage firm.
"There is still some way to go (up)," said Mr. Sabharwal commenting on the benchmark Sensex retracing part of its gain Tuesday and closing just below the 20,000-point mark.
He expects the sentiment to be further boosted by strong corporate results and other positive news flow.
Banking and capital-goods shares are good bets because of a likely cut in interest rates this month, he said.
The market expects the central bank to cut interest rates at its policy meeting Jan. 29 to help boost economic growth. Prospects for the rate cut were brightened after data Monday showed India's wholesale inflation slowed to 7.18% in December from 7.24% in the previous month.
The Reserve Bank of India last cut rates in April.
Another positive factor is the government's decision, announced Monday, to postpone the implementation of General Anti Avoidance Rules, which were introduced to fight tax evasion, to April 1, 2016. Dealers said this step will help improve foreign investment sentiment toward India.
Software shares ended mixed. Tata Consultancy Services (532540.BY)
Among other software shares, Wipro rose 0.5% to 420.15 rupees. Infosys (500209.BY)
Telecom shares rose sharply after Telecom Minister Kapil Sibal said the federal cabinet will take a final decision on the base price for an upcoming auction of telecom bandwidth by Feb. 4. Mr. Sibal's comment comes a day after the Supreme Court allowed telecom companies whose licenses were revoked by it last year to continue providing services until Feb. 4.
Mr. Sabharwal said telecom stocks are catching up with gains seen in software lately and banking stocks for more than a year.
Mobile telecom company Bharti Airtel (532454.BY)
Among other telecom stocks, Idea Cellular (532822.BY)
Axis Bank (532215.BY)
Cigarette major ITC was 2.0% higher at 283.40 rupees on bargain buying. Tata Motors (500570.BY)