Irish booster for global stocks, Sensex up 372 pts

Last Updated: Mon, Nov 22, 2010 20:00 hrs

Nifty rises 119.70 points to 6,010.

Investor sentiment across the globe received a boost on Monday as Ireland accepted an international bailout, putting to rest fears of an immediate debt crisis with a potential to engulf markets around the world.

Leading equity indices registered strong gains with National Stock Exchange (NSE) Nifty closing above the psychological mark of 6,000. India’s indices were the best performers in Asia and Europe. Foreign institutional investors (FIIs) continued buying. Domestic investors also pitched in.

The 30-share Sensex of the Bombay Stock Exchange (BSE) rose nearly two per cent, or 372.15 points, and closed at 19,957.59. The market breadth was strong. On BSE, more than 1,900 stocks rose and 1,067 fell. All broader and sectoral indices closed in the positive.

The 50-share Nifty rose 2.03 per cent, or 119.70 points, to end the day at 6,010. The index is expected to see a lot of action in the next couple of days ahead of the derivatives expiry on Thursday. The November contracts are trading at a slight discount at 6,008.

Market experts said Monday saw "decent" buying by institutional and retail investors on account of the "positive news flow over the weekend". The losses registered by Indian indices last week also led to some buying at lower levels. According to provisional data, FIIs were net buyers at Rs 336 crore, while domestic institutions net-bought shares worth Rs 212 crore.

Interestingly, Asia ex-Japan was one of the only three major equity fund groups that managed inflows in the week ended November 17, according to EPFR Global. Emerging market equity funds combined, however, posted inflows and extended year to date flows to $81.9 billion, close to the last year’s record of $83.3 billion, it added.

On the global front, while the exact size of Ireland’s bailout package is not known, reports suggest it will be more than $100 billion. Ireland has formally applied for aid from the European Union and the International Monetary Fund that have indicated the package will be subject to steps taken by the government there to restructure debt and cut budget deficit.

The development led to strong gains by most equity indices. In the European pack, Germany, Norway, the Netherlands and Sweden saw their benchmark indices gain ground. In Asia, Nikkei was up 93 points. The MSCI Emerging Markets Index advanced 0.4 per cent.

Back in India, RIL, which commands the highest weight in the Sensex, gained 1.53 per cent to Rs 1,012.10. On Friday, the company said its crude distillation unit number 1 and coker unit at the Jamnagar complex restarted on November 17. The gainers in the Sensex pack included Wipro, HDFC Bank, ONGC, Tata Power, Bharti Airtel and Tata Motors. Tata Motors will start selling its small car Nano in six more states in India from November 22.

More from Sify: