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Recouping a large portion of the previous week's steep losses in a single trading session on Monday, global markets rallied after European leaders on Sunday announced a rescue package to prevent Greece's fiscal woes from triggering a broader sovereign-debt crisis. The BSE 30-share Sensex surged 561.44 points or 3.35 per cent to 17,330.55 in a strong relief rally that spread across all the continents. The S&P CNX Nifty rose 175.55 points or 3.5 per cent to 5,193.60.Monday's big rally had come after the Sensex lost 4.5 per cent last week as the Greece debt crisis made investors edgy about its impact on global economic recovery. The relief rally in Asia came after European finance ministers and central bankers agreed on a new loan programme, which could top 750 billion euros ($971 billion) to keep the Greek debt crisis from spreading to other European nations. While European nations will chip in about 500 billion euros, the International Monetary Fund would contribute an additional 250 billion euros.With investor confidence getting a big boost after the Greece package, Japan's Nikkei 225 ended 1.6 per cent higher, Australia's S&P/ ASX 200 climbed 2.3 per cent, South Korea's Kospi advanced 1.9 per cent, China's Shanghai Composite rose 0.5 per cent and Taiwan's Taiex rose 1.3 per cent. Dow Jones Industrial Average futures jumped 243 points to 10,578 in screen trading, pointing toward a strong rebound on Wall Street after straight four days of declines. European shares too surged on Monday following the giant rescue package aimed with key indices in the UK, France and Germany jumping by 4.77 per cent to 8.47 per cent. US stocks surged on opening as the $1 trillion global emergency rescue package eased contagion concerns. The Dow Jones industrial average soared 332.61 points, or 3.20 per cent, at 10,713.04 when trading started on Monday morning.Indian investors became richer by Rs 164,500 crore on Monday as the market capitalisation — or the market value of all listed shares — jumped to Rs 61,49,416 crore. According to analysts, NSE's volatility index India VIX — a measure of traders' perception of near-term risks in the market based on options prices — tumbled 11.9 per cent to 24.14. The index, a measure of the market's expectation of volatility over the next 30 calendar days, had risen sharply last week as share prices slumped. "Dalal Street surged in early trade boosted by the euro zone rescue plan announced on Sunday. The Sensex regained the psychological 17,000 mark at the onset of the trading session. The Sensex alternatively moved above and below the 17,000 mark as the market moved in a narrow range in morning trade. We're happy that the uncertainty about Greece has gone. This could reassure foreign investors in India," said BSE dealer Pawan Dharnidharka.The fourth quarter corporate results announced so far have been fairly encouraging. The bi-annual Business Outlook Survey of the Confederation of Indian Industry (CII) showed that the Business Confidence Index (BCI) of the Indian industry increased by 1.5 points for the April-September 2010 period, compared to the past six months. Consumer confidence in India rebounded to reach its highest level since the third quarter of 2007, providing the most definitive sign that India is fast recovering from the economic downturn, according to the latest edition of the Nielsen Global Consumer Confidence Index. With 127 index points, India ranked number one in the recent round of the survey, followed by Indonesia (116) and Norway (115).The rally was led by index heavyweight Reliance Industries (RIL) which jumped 4.48 per cent, extending Friday's 2.27 per cent gains triggered by a favourable ruling in the Supreme Court on gas dispute with Anil Ambani controlled Reliance Natural Resources (RNRL). RNRL fell 5 per cent after tumbling 22.82 per cent on Friday as the company lost the battle. Reliance Infrastructure rose 8.49 per cent. Metal and mining stocks rebounded on bargain hunting after a recent steep slide. Interest rate sensitive banking shares rose on bargain hunting after a recent steep fall. HDFC Bank rose 4.68 per cent, as the stock recovered from losses in the preceding five trading sessions. it ICICI Bank rose 5.12 per cent as the stock rebounded from losses in the preceding five trading sessions.Tracking the EU's $1 trillion rescueAfter 11 hours of negotiations, EU finance ministers struck a $1 tn deal in the early hours of Monday that may have fended off a global debt crisis. The deal, which creates a 500-billion-euro ($670.9 bn) loan package backed by up to 250 billion euros from the IMF, is designed to stop Greece's debt problems spreading. As part of the plan, the ECB has begun buying sovereign debt on the secondary market. Below is a description of how the deal appears to have come together:MARKETS DRIVE ACTIONOn May 2, ministers hoped the Greek bailout announcement would be enough to calm financial markets. Euro zone heads of state would meet on May 7 to ink the deal. But they were overly optimistic while markets were sceptical. In the days ahead, extreme market fluctuations piled pressure on the leaders who were therefore expected to come up with a "big figure" bailoutTHE DINNER PACTEuro zone heads, EC president Jose Manuel Barroso, EU president Herman Van Rompuy and ECB governor Jean-Claude Trichet held talks for about four hours over dinner. Diplomats say they could not agree on whether it should be open-ended or a limit should be put on it. Germany wanted a 500 billion euro limit.UNEXPECTED OBSTACLESGerman finance minister Wolfgang Schauble was taken ill shortly after arriving in Brussels and a replacement from Berlin had to be flown in, delaying the start of talks. Once negotiations began in earnest, they focused on the disagreement over loan guarantees or loans. There was also a dispute over the ECB's role. Diplomatic sources say the meeting occasionally became heated.GETTING ECB ON BOARDIt is not clear what finally brought the ECB on board. On May 6, at an ECB governing council press conference in Lisbon, Trichet was asked if the bank would consider intervening in the market to buy government bonds. "I would say we did not discuss this option," he said. But three days later the bank had apparently decided otherwise. In the end it took 11 hours. By just after 2 am on Monday in Brussels, word was emerging of the deal that had been struck.Rupee bounces backMUMBAI: The rupee posted a sharp gain of 64 paise against the US dollar, the biggest one-day gain in nearly 12 months, on heavy selling of the American currency and its depreciation against euro. On the other hand, the euro climbed against the dollar after EU and IMF unveiled a combined $1 trillion rescue package to save the euro zone currency. Banks and exporters sold the dollar heavily following weakness in the US currency overseas and expectations of a further fall in the near term. The rupee closed at 44.84/85 a dollar, a gain of 1.41 per cent, or 64 paise. The rupee had plunged by Rs 1.125, or 2.54 per cent, last week in line with the benchmark Sensex, which crashed by nearly 790 points or 4.50 per cent during the same period.... but Gold plungesMUMBAI: Gold prices crashed by Rs 460 per ten grams at the bullion market here on heavy offloading by stockists and speculators sparked by a steep fall in global markets. Gold in global markets suddenly turned bearish and lost its safe-haven tag after the global emergency fund was approved by European policy makers to prevent a sovereign debt crisis spreading over to other eurozone nations.Standard gold tumbled by Rs 460 per ten grams to close at Rs 17,495 from last Saturday's closing level of Rs 17,955. Pure gold dropped by Rs 455 per ten grams to end at Rs 17,580 as against Rs 18,035 previously. Silver ready fell by Rs 190 per kilo to settle at Rs 29,040 from Rs 29,230 previously.
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