In its biggest single-day gain since March, the benchmark Sensex of the Bombay Stock Exchange on Friday rose 513 points, or 2.9%, to close at 18,241 on the back of a sharp dip in global crude oil prices and a rise in international markets after Greece reached a deal to avoid default.
The broader Nifty of the National Stock Exchange rose 2.8% to close at 5,470.
Brent crude slipped to a four-month low of $107 a barrel on Friday, down from $120 per barrel ten days, ago as the International Energy Agency announced a decision to release 60 million barrels of oil from strategic government stockpiles in a bid to push down crude prices.
India imports around 75% of its crude requirement and soaring oil prices has been a concern.
Global markets rose sharply earlier during the day as Greece won the consent of international lenders for a five-year austerity plan intended to avoid looming bankruptcy and Prime Minister George Papandreou pledged to push radical economic reforms through Parliament.
While China’s Shanghai Composite Index rose by 2.1%, Hang Seng in Hong Kong rose by 1.9%. In Europe, premier indices in the UK and Germany were up by 0.8% during the day.The Indian markets were, however, the biggest gainers.
“A fall in the prices of crude oil and the much-awaited EGoM meeting on fuel prices along with the settlement of debt issues in Greece improved investors sentiments,” said R Venkataraman, executive director, India Infoline. “The market is expected to be range-bound as it is waiting for the cues from monsoon, price rise and interest rates movement.”
“The fall in oil prices have given the government option not to raise fuel prices immediately, and if they dip to about $85 a barrel, then there may be cut in energy prices, considerably reducing fears of inflation and high interest rate pressures,” said Kishor Oswal , chairman, CNI Research.
Metal, banking and capital goods sectors topped Sensex gainers. While the BSE metal index rose by 3.4%, banking and capital goods indices jumped by 3.3% each. Among Sensex stocks, the biggest gainers were Hero Honda and State Bank of India, which rose by 6.1% and 6.0% respectively.