india trader
A broker monitors a screen displaying live stock quotes on the floor of a trading firm in Mumbai. Reuters

Indian shares extended record gains on Tuesday, with technology shares advancing for a second day.

The S&P BSE Information Technology Index gained 2 percent on Tuesday, led by Infosys and Tata Consultancy Services.

Here are the reasons supporting the rally:

  • Earnings optimism

Earnings season is about to kick-start with Tata Consultancy Services and Infosys, country's two biggest software exporters, scheduled to report on July 13 and 14.

Analysts expect software exporters to report weak numbers for their retail vertical, but expect growth to be driven by manufacturing, BFSI (Banking, Financial services and Insurance) and telecom verticals.

  • Coming out of the blues?

Technology space has witnessed rough phase in recent times on worries over layoffs and H-1B visa issues. Appreciating rupee against dollar also dented IT sector's trade prospects.

While the IT index's recent rebound erased its year-to-date decline, it is still the worst performer in 2017 after the health-care measure.

  • Improved global sentiment

Markets across the globe are hovering near all-time highs, as investors are shrugging off political uncertainty and placing their faith in a continued earnings expansion on broadening global growth.