Mumbai: Snapping 3-day losing streak, the BSE benchmark Sensex on Wednesday surged 242 points as funds bought IT stocks, led by heavyweight Infosys, amid the rupee falling to nearly two-year low and firming global markets.

Ignoring spurt in inflation, the Sensex, which had lost 700 points in the previous three sessions, bounced back 242.16 points to 16,709.60, after touching a high of 16,754.22.

The broad-based National Stock Exchange index Nifty shot up 71.60 points to 5,012.55, after touching an intra-day high of 5,026.15 as stocks of IT, metals, banking and refinery ended in positive zone.

Brokers said investors picked up IT stock in particular, on expectations of improved revenues as the rupee fell to two year low against the US dollar. Indian software companies get about 85 per cent revenues from the US and European markets.

The IT sector index gained the most - up 4.27 per cent at 5,039.74 as the segment major and second heaviest on the benchmark - Infosys - soared 5.78 per cent. Wipro (4.34 pc) and TCS (2.24 pc) also made smart gains.

The rupee tumbled to a nearly two-year low of Rs 48.01 per US dollar.

They said a better trend in the Asian region and higher opening in Europe boosted the trading sentiment, even as back home the overall inflation soared to 9.78 per cent in August, from 9.22 per cent in previous month.
The market shrugged off the rise as Finance Minister Pranab Mukherjee said the government and RBI together will be able to tackle soaring inflation.

Barring capital goods, all sectoral indices remained higher and in 30-BSE index stocks, 24 closed higher.