EU bailout takes Sensex to 1-year high | business | Hindustan Times
Today in New Delhi, India
Nov 20, 2017-Monday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

EU bailout takes Sensex to 1-year high

The stockmarket benchmark BSE Sensex rose 561 points or 3.3 per cent — the biggest single-day gain since the markets cheered the mandate for United Progressive Alliance (UPA) government in May 2009 — to close the day at 17,330. Why Greece crisis matters to India

business Updated: May 11, 2010 02:58 IST
HT Correspondent

The stockmarket benchmark BSE Sensex rose 561 points or 3.3 per cent — the biggest single-day gain since the markets cheered the mandate for United Progressive Alliance (UPA) government in May 2009 — to close the day at 17,330.

This rise was in tune with markets worldwide that celebrated European Union and IMF finalising a $1 trillion (Rs 45 lakh crore) relief package, or bailout, to address the immediate economic concerns of Greece and some other European nations.

The package, almost the size of India’s GDP, will address the immediate concern on the debt repayment crisis of Greece.

“This will bring the current panic situation on a hold,” said R. Venkataraman, executive director of the brokerage India Infoline.

The rally at the Sensex and NSE Nifty (that rose 176 points, or 3.5 per cent, to close at 5,194) took off from the Asian markets where leading indices in Hong Kong, Indonesia and Japan rose by 1.5-4.0 per cent.

As market gains moved from Asia to Europe, the Sensex rise turned sharper. Greece and Spain — the big beneficiaries of this trillion-dollar package — were up 9 per cent and 13
per cent, while UK, Germany and France were up 4.5-8.0 per cent.

Few hours later, further west, the Dow Jones Industrial in the US was up 3.7 per cent or 380 points in the initial trading hours on Monday.

But don’t bank on this rise to sustain. “There is no clarity on how the package will work out,” said Aseem Dhru, CEO, HDFC Securities. “Volatility is likely to prevail in the market as there is no clear sense of direction.”

As markets rose, foreign institutional investors cashed in, pulling out Rs 1,590 crore on Monday.

“Day traders were at the centre of action and they played on the rise in sentiments,” said the head of a leading mutual fund on conditions of anonymity. “My concern is on the execution of the package announced.”

Real estate and metals companies led the rally, rising over 6 per cent each, after they got hammered the most over the previous week. While JSW Steel rose by 8.4 per cent, Tata Steel and Hindalco gained 7.7 per cent each during the day. Unitech and DLF rose by 7.0 per cent and 6.7 per cent respectively.