Sensex jumps 300 points on reform hopes, Greece bailout

The Indian stock markets rallied today, as investors expected the Parliament logjam to end soon, and clear the way for implementation of the reforms initiative announced by Finance Minister P Chidambaram.

The strong opening of the European markets also added to the upbeat mood.

The sensex ended up 1.65 percent at 18,842 and the Nifty 1.62 percent at 5,727. European shares climbed to a near three-week high after global lenders clinched a deal to reduce Greek debt and disburse the country’s next aid installment.

[caption id=“attachment_537346” align=“alignleft” width=“380”]  The Indian markets were riding high on optimism the government will be able to clear reforms announced in September. Reuters[/caption]

“A light market has risen on factors like Greece, increasing support on reforms and Moody’s statement. The finance minister’s press conference would be a further positive,” said Vivek Mahajan, head of research, Aditya Birla Money.

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[caption id=“attachment_537346” align=“alignleft” width=“380”]  The Indian markets were riding high on optimism the government will be able to clear reforms announced in September. Reuters[/caption]

The Indian markets were riding high on optimism the government will be able to clear reforms announced in September, which were aimed at reviving growth and staving off a credit rating downgrade.

In another major relief to the government, which is struggling to keep the reform process on track amid stiff political opposition, rating agency Moody’s on Tuesday reaffirmed India’s credit rating as stable in part due to the country’s high savings and investment rates.

The hopes of the reform steps getting a leg up heightened after the ruling United Progressive Alliance managed to get the necessary numbers in Parliament to support the retial FDI policy, even if it is put to vote.

Signalling the government’s confidence, Chidambaram today expressed hopes that the government will be able to outline steps to push through its economic reforms.

The Opposition, however, is demanding the government should roll back its plans to open up the retail sector.

Chidambaram also said that the proposed Bill on micro-finance institutions will provide adequate legislative framework for development and regulation of the sector. The announcement pushed SKS Microfinance stock to close up 5 percent.

Bank stocks were major gainers today with HDFC Bank closing up 2.69 percent and ICICI Bank closing up 1.54 percent.

Stocks in news

Suzlon closed up 9 percent after the company has admitted to debt restructuring process.

Tech Mahindra closed down 2 percent after the company denied reports of British Telecom selling stake in the company.

NTPC closed down 0.38 percent after the govenment kicked off the divestment process in the company.

Cinemax closed up 1.83 percent after it informed the Bombay Stock Exchange that it in in exclusive talks with multiplex PVR for a potential stake sale.

Pantaloon Retail closed up 4 percent hoping that the government will be able to resolve the logjam on the FDI issue soon.