Indian shares rise 0.7 pct, weak rupee lifts techs

By Sumeet Chatterjee

BANGALORE (Reuters) - Indian shares rose 0.74 percent on Monday, with Reliance Industries and outsourcers leading as the market snapped a five-day losing streak, but trade was choppy after industrial output growth slowed to a six-year low.

Traders said the gains were underpinned by a rise in European stocks after a better-than-expected quarterly results from HSBC eased concerns about the financial sector. U.S. index futures also suggested a higher open for the Wall Street.

Infosys Technologies rose 1.3 percent to 1,772.50 rupees, and other leading software-service firms Tata Consultancy Services, Wipro and Satyam Computer also rose as the rupee weakened past 42 per dollar for the first time since April 2007.

The rupee has fallen more than 6 percent in 2008, and Khandwala Securities said the depreciation would have a positive impact on the operating profit margins of IT companies, provided the currency stayed weak for some time.

The rupee rose more than 12 percent against the dollar in 2007, squeezing the profit margins of the firms which get more than half their revenue from the United States.

The 30-share BSE index rose 123.83 points to 16,860.90, with 18 components gaining. During trade, it fell as much as 1.1 percent to its lowest since mid-April after the weak output data.

"It was technical bounce-back after the recent fall," said D.D. Sharma, vice president at Anand Rathi Securities.

"The industrial production data didn't come as a shocker, as everybody knows that there will be a slowdown this year and it has been built in prices to some extent. In the short to medium term, the market will continue to be in a consolidation phase."