Home / Business / Sensex rises after Greek bailout deal; Kingfisher shares down 20%

Sensex rises after Greek bailout deal; Kingfisher shares down 20%

Mumbai(Reuters): Indian shares rose on Tuesday, as investors cheered the long-awaited agreement for a crucial second bailout package for debt-stricken Greece, ahead of the first release of India’s new annual CPI inflation data.

Eurozone finance ministers concluded 13 hours of talks by sealing a bailout for the country that will resolve its immediate financing needs with a 130-billion-euro rescue package and measures to cut its debt to 121 percent of GDP by 2020.

“Greece is, of course, good news for the market, it is very positive news,” said Kishor P. Ostwal, chairman of CNI Research.

“In addition to the news from Europe, things will likely stay positive thanks to a lot of short positions in the market.”

The main 30-share BSE stock index was up 0.49 percent at 18,378.05 at 10:15am. (0445 GMT), with 21 of its components rising.

Lenders led the gains, driven by hopes of an easing of global economic turmoil by the Greek bailout and Saturday’s decision by China’s central bank to cut its reserve requirement ratio for banks, freeing up funds for loans.

State Bank of India, the country’s largest lender, rose 1.8 percent, while rival ICICI Bank gained 0.5 percent. The sector index topped the benchmark index.

India will release its first ever annual inflation data based on the consumer price index (CPI) on Tuesday, a move to monitor retail prices that is expected to make monetary policy more effective in addressing demand-driven pressures.

Kingfisher Airlines, the cash-strapped carrier that cancelled scores of flights over the weekend as its bank accounts were frozen by tax authorities, plunged as much as 20 percent.

Aviation regulator DGCA has summoned Kingfisher to explain the cancellations, while a newspaper said on Tuesday the carrier would soon return aircraft to lessors due to payment defaults.

The stock has lost more than 60 percent of its value since January 2011.

State-run Oil and Natural Gas Corp was up 3.9 percent, a day after a local media report said two Gulf wealth funds had pledged to buy up the company’s planned 5 percent stake sale.

The broader 50-share NSE index was up 0.5 percent at 5,592.10.

Shares posted their seventh straight weekly rise last week, their best run in nearly two years, bolstered by strong foreign fund inflows.

The benchmark BSE index is up more than 18 percent this year, mainly on buying by overseas portfolio investors who have pumped in over $4.4 billion so far, after pulling out more than $500 million in 2011.

MSCI’s broadest index of Asia Pacific shares outside Japan briefly turned positive on news of the agreement, before slipping again.

STOCKS ON THE MOVE

* Syndicate Bank rose as much as 2.7 percent after the lender said it planned to raise 5.4 billion rupees through an issue of preferential shares to the government.

* Allahabad Bank climbed as much as 2.4 percent after the state-run lender said its board would meet on Wednesday to consider issue of shares to Life Insurance Corp of India on a preferential basis.

* JSW Steel rose 2.4 percent after India’s No. 3 steel maker said it would borrow $275 million for buyback and redemption of foreign currency convertible bonds and capital expenditure.

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