Shawshank, VA 9/20/2011 (PennyPayDay) – The Indian markets rose sharply on Tuesday, as falling commodity prices eased inflation-related worries and positive European cues ahead of a U.S. Federal Reserve meet spurred bargain hunting in heavyweight stocks after a loss the day before. Besides, reports that the government has deferred ONGC's about Rs,11,000-crore follow-on public offering helped ease secondary markets' concerns over liquidity squeeze.Investors across Asia and Europe shrugged off news of Italy's downgrade by S&P, an event that dragged down Asian stocks in early trading, and cheered reports that Greece was near a deal with international lenders to get its next tranche of bailout funds.
Greece described a conference call between Finance Minister Evangelos Venizelos and officials from the European Commission, the International Monetary Fund and the European Central Bank as "productive and substantive " and said that further talks aimed at assessing the progress made by Greece in meeting the financial targets would resume on Tuesday.
The outcome of the talks would decide whether Greece gets an 8 billion euro ($11 billion) tranche of the rescue loan slated for October.
Meanwhile, investors awaited the outcome of a two-day Federal Reserve meeting starting later today. Fed Chairman Ben Bernanke is expected to announce some monetary measures or extra steps to boost the U.S. economy, which is at risk of slipping into another recession.
The benchmark 30-share Sensex rose steadily to close near the day's high at 17,099, up 354 points or 2.11 percent over its previous close, while the broader Nifty index on the NSE climbed 108 points or 2.15 percent to 5,140. Second-line stocks posted relatively modest gains, with the BSE mid-cap and small-cap indexes rising 0.9 percent and 1.23 percent, respectively.
IT stocks led the rebound after the Indian rupee slipped further to a fresh two-year low versus the dollar in early trading on Tuesday on continued worries over Europe's debt crisis. Wipro closed up 2.8 percent, Infosys climbed 3.2 percent and TCS rallied nearly 4 percent.
Market heavyweight Reliance Industries jumped 3.7 percent after a unit of the company joined hands with Siemens to jointly develop homeland security solutions for safe, secure and smart cities and highways in India.
Rate-sensitive banking stocks also posted strong gains on expectations the Reserve Bank of India is nearing the end of its tightening cycle. HDFC Bank rose 1.3 percent, ICICI Bank gained 2.7 percent and SBI jumped 3.8 percent. Property developer DLF rallied 3.5 percent and mortgage lender HDFC rose 3.4 percent.
Among automakers, Maruti Suzuki rose 1.2 percent even as labor woes continued at its Manesar plant and reports suggested the labor face-off is spreading all through the Gurgaon-Manesar industrial belt.
Tata Motors closed up 2.9 percent after its luxury car unit Jaguar Land Rover said it would invest £355 million on a new engine plant in central England. Mahindra & Mahindra added 1.8 percent after its South Korean subsidiary Ssangyong Motor briefly outlined its mid-term plans to develop new cars and introduce its models in emerging markets.
Shares of Anil Ambani-controlled Reliance Communication soared 4 percent after reports said Blackstone and Carlyle Group are making due diligence to jointly bid for the company's tower business. Subex rose 3.8 percent after the company signed a pact to sell its activation business to NetCracker. Everonn Education was locked at the 5 percent upper circuit limit after its board approved a preferential allotment of shares to Dubai-based Varkey Group.
Among those that lost ground, state-run oil explorer ONGC fell 2.9 percent amid reports that it may be forced to double its fuel subsidy bill this year to help reduce the government's fiscal deficit. IVRCL lost 3.1 percent on reports of a CBI enquiry for alleged irregularities found in Tsunami housing project in Puducherry.
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