The benchmark Sensex on Monday reversed early morning's steep losses to end higher by 82 points, or 0.5%, at 16,912 points on last-hour buying after investors cheered finance minister Pranab Mukherjee's announcement deferring the controversial GAAR (General Anti-Avoidance Rules).
The Sensex had fallen 318 points in early trade after French President Nicolas Sarkozy conceded defeat to his socialist rival Francois Hollande, who is against austerity measures proposed by European leaders to turn around ailing euro zone economies.The news dragged down all global markets. While the UK's FTSE 100 dropped 2%, Germany's DAX was down 1%, Japan's Nikkei 3% and Hong Kong's Hang Seng dipped 2.5%.
"Deferring GAAR implementation for a year will give confidence to investors and we will not see FIIs (foreign institutional investors) pulling out money from the Indian market," said Deven Choksey, managing director, KR Choksey Securities. "Now we may see the rupee strengthen in coming days."
The Nifty of the National Stock Exchange, which slipped below the crucial 5,000 mark in early trade, also ended 27 points higher at 5,114.
Snapping the downward trend of the last four sessions, the rupee on Monday registered a 57 paise gain to end at 52.91 per dollar.