Indian shares rose 0.43 percent on Wednesday, as global equities gained on growing hopes of a decisive solution to the eurozone debt crisis soon, while data showing foreign funds' resumption of investing in local shares this month supported sentiment.
Investors also cheered an end to the parliament logjam, after government suspended its move to open the country's $450 billion supermarket sector to foreign firms in the face of a huge political backlash, which had seen the opposition disrupting parliament for two weeks.
Software services firm Infosys, which has the second highest weightage on the benchmark index, and Housing Development Finance Corp were among the top gainers. The main 30-share BSE index closed up 71.73 points at 16,877.06, with more than two-thirds of its components closing in the green. The index, which rose as much as 1.2 percent earlier, is still down 17.7 percent this year. The broader 50-share NSE index rose 0.47 percent to 5,062.60 points.
There were almost equal gainers and losers in the broader market. About 611.5 million shares changed hands. Foreign funds have invested $313.82 million in Indian shares so far this month. In 2011, they have pulled out about $186.33 million, data from the capital markets regulator, Securities and Exchange Board of India showed.
Lenders rose on hopes that a cycle of rate increases, which started in March 2010, may be paused when India's central bank meets next week, and on the view that the central bank would take measures to support liquidity when required. Mortgage lender HDFC gained 2.02 percent to 675.55 rupees. India's biggest lender State Bank of India rose 1.8 percent, while HDFC Bank gained 1 percent.
Majority of the fund managers believe that allocation towards Indian equity markets at current levels should be increased with an investment horizon of one year and above, a quarterly fund managers survey by ICICI Securities released on Wednesday showed. Industry bellwether Infosys gained 2.14 percent, while smaller rival Wipro added 3.6 percent.