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Sensex shows gain of 160 points on global cues

The BSE benchmark Sensex recovered by 160 points to finish at 18,722.30 due to fag-end buying from operators in view of good monsoon rains, easing of food inflation and agreement of European Union-IMF on a bailout deal for debt-ridden Greece.

business Updated: Jul 23, 2011 16:41 IST

The BSE benchmark Sensex recovered by 160 points to finish at 18,722.30 due to fag-end buying from operators in view of good monsoon rains, easing of food inflation and agreement of European Union-IMF on a bailout deal for debt-ridden Greece.

The eurozone countries and the International Monetary Fund agreed to give Greece a second bailout worth Euro 109 billion ($155 billion), on top of the Euro 110 billion granted a year ago, in a bid to avert default by Athens. The deal gave a much needed sighs of relief in global markets.

US stocks rallied as the rescue deal boosted financial stocks that were battered in recent weeks by fears of a European debt crisis.

Meanwhile, food inflation fell to 7.58% in the week ended July 9, from 8.31% in the preceding week.

However, finance ministry's statement that headline inflation will remain "sticky" till December and high export growth may not be sustained due to euro zone crisis weighed on the market sentiment, a broker said.

Expectations of a further rise in key interest rates by the apex bank in its first quarter monetary policy meeting on July 26, continued to daunt the market sentiment.

Sensex resumed higher at 18,592.19 and hovered in a range of 18,765.60 and 18,415.36 before finishing the week at 18,722,30, showing a net rise of 160.38 points, or 0.86%, from its last last weekend's level.

Forex: Moving in line with the equity market, the rupee rallied by 16 paise to close at 2-week high of 44.35/36 against the US currency following smart rise in equities at the fag-end of the week amid fresh dollar selling by some banks and exporters.

The Bombay Stock Exchange benchmark Sensex recovered by 160.38 points, or 0.86%, on the back of a global bullish trend.

Exporters and some banks preferred to reduce their dollar positions, expecting fall in dollar value due to strong euro on the back of passing of a second bail-out package for the debt-ridden Greece by euro zone leaders and IMF.

In a lacklustre trading at the Interbank Foreign Exchange (Forex) market, the domestic unit resumed lower at 44.58/59 per dollar and hovered in a range of 44.3400 per dollar and 44.6100 per dollar before finishing the week at 44.35/36 per dollar.

Alpari Financial Services (India) CEO Pramit Brahmbhatt, said rupee ended strong. The positive local shares and the falling dollar index were the main reasons behind the rupee's rise.

Markets remained uncertain before the European summit as heavy volatility were seen in major asset classes across. However, the Euro rallied against the dollar on Thursday after European Union leaders agreed to a new $157 billion bailout plan for Greece and reiterated their commitment to containing the current debt problems from spreading.

Equity markets across rallied after the news with major global indices gaining more than a% on Thursday.