Sensex off day's high; TCS, Infy decline on rising rupee

Indian shares erased somewhat gains, losing more than 150 points from day's high of 18,866.87 due to profit booking in Infosys and TCS. The 30-share BSE Sensex gained as much as 518 points intraday after the Mulayam Singh Yadav-led Samajwadi Party's decision to support Congress from outside.

The index climbed 355.67 points or 1.94% to 18,704.92. Meanwhile, the 50-share NSE Nifty rose 119 points to 5,673.30, which hit 5700 level for the first time since July 26, 2011.

Indian rupee rose by 78 paise or 1.44% to 43.59 against the US dollar, which is an indication that the foreign institutional investors may be buying huge quantity of equity shares today.

Experts believe the government will definitely come up with slew of reforms to revive sluggish economic growth. Finance Minister P Chidambaram has announced a lower tax on foreign borrowings by local companies.

He said, "Tax will be cut to 5% from 20% and withholding tax liability on Indian companies reduced to 5%." The reduced tax will apply to borrowings between July 2012-June 2015.

FM also approved Rajiv Gandhi Equity Savings Scheme. ETF and mutual funds brought under Rajiv Gandhi Equity Scheme and investors will get 50% tax rebate on investment.

Country's largest software services exporters TCS and Infosys fell 0.8% on account of rising rupee.

Top lenders State Bank of India and ICICI Bank rallied over 4.5% while their rival HDFC Bank was up nearly 3%.

State-run power equipment manufacturer BHEL topped the buying list with 7% gains. Private power producer Tata Power and steel producer Sterlite Industries surged 4.5-5%.

Telecom operator Bharti Airtel, engineering conglomerate Larsen & Toubro and Tata Group's Tata Steel jumped 3% each.

Cigarette major ITC, housing finance company HDFC and private oil & gas producer Reliance Industries went up 1.5-2.5%.

On the global front, European markets were marginally higher.