Sensex soars 439 points, ends at 2-month high

Positive global cues and a turnaround in domestic sentiments drove equities to a two-month high Friday. The 30-share BSE Sensex jumped 439 points or 2.6% to end at 17,430, a level seen for the first time since May 2. The 50-share Nifty index advanced 130 points to close at 5,279.
 
The rupee, too, pulled back sharply gaining 1.4%, and traded below the psychological 56 to the dollar mark.

European stocks maintained morning gains on the back of the agreement to use the continent's permanent bailout fund to recapitalize struggling banks. EU leaders also agreed to the idea of a tighter union in the long term.

Spain's IBEX index traded off the day's high, rising 2.5% while the CAC 40 benchmark in France extended gains, rising 2.4% higher. Earlier, Asian stocks closed near the day's high. The benchmark in Hong Kong jumped 2.2%, while Japan's Nikkei index ended 1.5% higher.

Domestic sentiments were boosted by the new draft guidelines on the general anti-avoidance rules (GAAR) announced late night yesterday. According to the guidelines, the tax evasion rule will be invoked only in those cases where foreign investors have opted to take the benefit of tax avoidance treaties. The rules would not apply retrospectively and will be triggered only above a certain income threshold.

Markets are likely to give thumbs up to these measures, analysts say.

'There is some cause for hope. Over the last two days, there have been new people at the finance ministry... Last night, the draft guidelines for GAAR have been out and they seem logical... Markets have been hearing about gloom and doom so far, so given the amount of bad news over the last 30 days, this gives some hopes," Shanti Ekambaram of Kotak Bank told NDTV Profit.

Banks, metals, power, and capital goods stocks saw strong buying interest and gained 3-4% on the BSE. ICICI Bank, ITC, Reliance Industries, L&T, and HDFC Bank were the top Sensex movers, adding over 200 index points to the BSE benchmark.

Steel major JSPL (8.8%), copper miner Sterlite (5.5%), private lender ICICI Bank (5.4%), Tata Power (5.3%), and power equipment manufacturer BHEL (5.25%) were the top Sensex gainers.

Oil and gas major Cairn India (-5.9%) and oil refiner BPCL (-0.85%) were the only two stocks to end lower on the Nifty index. Cairn India shares fell after its erstwhile promoter Cairn Energy sold shares in the open market.

The market breadth was strong with over 85% stocks rising on the broader BSE 500 index.