Indian shares ended up 2.6 percent on Wednesday to their highest close in over three weeks as investors cheered results from IT industry bellwether Infosys and shrugged off data suggesting growth in Asia's third-largest economy was losing steam. Strong revenue growth from India's No 2 software services exporter and a less-than-expected cut in its full-year sales outlook began the quarterly earnings season on a high, offsetting fears of slowdown at home and further afield.
Markets rose as much as 2.7 percent on a strong closing rally after a slight retreat on data showing industrial output in August grew less than expected and early falls in European markets on continued fears regarding the region's debt crisis. Nasdaq-listed Infosys' shares led the market, closing up 6.98 percent at 2,679.35 rupees, having risen as much as 7.2 percent.
The main 30-share BSE index closed up 2.55 percent, or 421.92 points, at 16,958.39 points, its highest close since September 21. The 50-share NSE index gained 2.51 percent to 5,099.40 points. In the broader market, gainers were ahead of losers in the ratio of 2.4:1 on total volume of about 562 million shares.
The rise was mainly driven by strong gains from Infosys and heavyweight firms Reliance Industries, which closed up 2.74 percent, and State Bank of India, which ended up 6.09 percent. All but three of the index components ended in positive territory. Rival IT stocks including Wipro, India's third largest software services exporter, and Tata Consultancy Services , the industry No 1, joined Infosys in leading gains, closing up 2.59 and 3.67 percent, respectively.
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