Sensex surges 513 points on global cues; regains 18,000 mark

The underperforming BSE Sensex soared 513 points to regain the 18,000 mark.

It was the day of the bulls after a long time. The underperforming BSE Sensex soared 513 points on Friday to regain the 18,000 mark after nine days on the back of sharp dip in global crude oil prices,firm overseas cues after Greece reached an agreement for an austerity plan to avoid a debt default and domestic short covering.

In the biggest single day gain since March 2011,the Sensex surged 2.89 per cent to reach 18,240.68 the largest gain after March 1,when Budget proposals had kicked it up over 600 points. The NSE 50-issue Nifty also flared up 151.25 points or 2.84 per cent to end at over one-week high of 5,471.25. Realty (3.76 per cent rise),metals (3.40 per cent) and IT (3.37 per cent) were the main sectoral gainers. Aviation stocks also skyrocketed.

Analysts said easing crude oil prices reduced investor concerns of inflationary pressures and hike in interest rates. Investors,however,remained wary as the government is expected to make a decision on raising state-controlled prices of fuel such as diesel and cooking gas,which could push up an already sticky inflation,which in May hovered over 9 per cent.

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Amar Ambani,head of Research,IIFL,said,A strong bout of short-covering,coupled with a world-wide relief rally lifted the spirits in the Indian markets today. All eyes will be on EGoM on fuel prices,which is scheduled to take place later this evening. Any hike in diesel and LPG prices will be well received by the markets. On the flip side,any move contrary to market expectations could be disappointing.

Fridays rally helped the Sensex outperform the global indices. Earlier in the week,the US markets were under pressure following Feds statement that the economic recovery is losing steam. However,global indices soon recouped the losses and are also expected to end the week in the positive zone due largely to the steps taken by the Greek government towards averting a debt default, said Sanjeev Zarbade,vice president,Kotak Securities.

Aviation stocks rallied with budget carrier SpiceJet hitting the upper circuit on the BSE buoyed by a sharp fall in crude oil prices. Shares of SpiceJet skyrocketed by 19.85 per cent to hit the upper limit of Rs 32.60 on the BSE. Reports that SpiceJet has sought the RBIs approval to raise $ 270 million from Canadas export finance agency Export Development Canada for aircraft purchases also boosted the stock. Jet Airways gained 13.76 per cent to settle at Rs 469.65,while Kingfisher Airlines closed at Rs 38.80,up 7.93 per cent from the previous close.