Stock market opens with profit, courtesy Cyprus

Last Updated: Mon, Mar 25, 2013 14:10 hrs

The stock market here opened with profits of over one percent on Monday, in response to Cyprus shutting down its second largest bank and inflicting heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro bailout.

The agreement came hours before a deadline to avert a collapse of the banking system in fraught negotiations between President Nicos Anastasiades and heads of the European Union, the European Central Bank and the International Monetary Fund.

Sunil Shah, an expert on the Indian stock market ,said, "Today the markets opened with a gap-up because during the weekend the deal was struck regarding the Cyprus bailout. So after Euro zone and the global market agreed upon the Cyprus deal and they announced the package of 10 billion dollars, it was expected that the Asian markets and the Indian market will open with a gap-up and that is what we have seen. Second thing is we have seen last five or seven trading sessions where market ended lower and lower. So, this kind of pullback was expected and anticipated in any case and Cyprus is one of the reasons. So the market is expected to remain buoyant and strong during the day."

The Bombay Stock Exchange had been struggling to gain points in the past six or seven sessions, but analysts predicted that any bailout for Cyprus would boost the Asian markets, including India.

The head of the EU rescue fund said Cyprus should receive the first emergency funds in May.

IMF chief Christine Lagarde said the agreement was "a comprehensive and credible plan" that addresses the core problem of the banking system.

The EU and IMF required that Cyprus raise 5.8 billion Euros from its banking sector towards its own financial rescue in return for 10 billion Euros in international loans. (ANI)

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