Mumbai: Markets snapped a 4-day slide and rebounded 2% on Tuesday, as investors across Asia pinned hopes on renewed efforts by European officials to find a way to cut Greece’s debt.
Energy major Reliance Industries and No.2 lender ICICI Bank led the gains, both rallying more than 3%.
European Central Bank policymakers said on Monday that officials were working to increase the firepower of the region’s rescue fund in their latest effort to staunch a crisis that US President Barack Obama said was “scaring the world”.
At 11:12am, 30-share BSE index was up 1.98% at 16,364.9, with 28 components in the green, after falling nearly 6% over the past four sessions.
K.K. Mital, head of portfolio management at Globe Capital, said a recovery in global markets helped the rebound but the outlook remained cloudy.
“The market may go up a bit but till the time the global and the European picture is not clear, a major bounce back is ruled out,” he said. “We are very much in-line with the global events.”
The MSCI’s measure of Asian markets other than Japan rallied more than 4%, while Japan’s Nikkei firmed over 2%.
Banks, which are usually in the forefront of a pullback rally, climbed on the back of talk that Europe would pursue efforts to stabilise its financial sector.
State Bank of India , the country’s largest lender rose more than 2%, while HDFC Bank climbed more than 1.5%.
Kishor Ostwal, chairman and managing director at CNI Research, said the market was oversold and the turnaround in global investor sentiment was triggering short-covering.
The 50-share NSE index rose 1.72% to 4,919.45. There were 5.8 gainers for every loser, but volume relatively light at 166.56 million shares.
Export-driven software services bellwether Infosys rose nearly 2%, while bigger rival Tata Consultancy Services firmed 2.8% on hopes a possible solution to the European crisis would boost demand for outsourcing.
Shares in Pipavav Defence and Offshore fell more than 4% after India’s defence ministry decided to put on hold a joint venture between the firm and state-run Mazagon Dock to build warships and submarines.
JB Chemicals & Pharmaceuticals rose nearly 3% after it called off a proposed $34.9-million-sale of its prescription drugs business in Russia to Dr Reddy’s Laboratories .
GMR Infrastructure firmed more than 3% after the company agreed to sell a 30% stake in its unit, GMR Energy (Singapore) Pte Ltd, to Petronas International Corp.