| Date: |
28-10-2011 |
| Subject: |
Indian Markets Set To Rally On EU Debt Deal |
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The Indian markets are poised to open sharply higher on Friday, as the local markets play catch-up to global equities that rallied on Thursday on the heels of news that European leaders have finally struck a deal to potentially resolve the regional debt crisis.
The much-awaited Euro summit concluded with the member countries agreeing on bank recapitalization, models to boost the power of the EFSF to 1 trillion euros and a voluntary 50 percent haircut in the Greek private sector involvement.
U.S. stocks posted impressive gains overnight, as investors reacted positively to news of a potential resolution of the European debt crisis and some relatively upbeat U.S. economic data, with a report from the Commerce Department showing third quarter GDP growth that met economist estimates.
The Dow jumped 2.9 percent, the Nasdaq climbed 3.3 percent and the S&P 500 ended up 3.4 percent. Major European markets too ended with strong gains on Thursday, with the German DAX and French CAC 40 indexes climbing 5-6 percent.
Other Asian stock markets are rising across the board, extending Thursday's rally, as a deal on Greek debt and an agreement to increase the eurozone's bailout fund eased fears of global financial contagion pulling down world economic growth.
The Indian markets were closed on Wednesday and Thursday to celebrate Diwali. Meanwhile, trading for Samvat year 2068 commenced on a positive note, with the benchmark indexes Sensex and the Nifty rising around 0.2 percent each in a special Muhurat trading session held on Wednesday evening, after the central bank signaled it would pause its rate tightening cycle going ahead to support growth.
However, inflation still remains a cause of concern. Data released by the commerce and industry ministry on Thursday showed that India's annual food inflation jumped to a 6-month high of 11.43 percent in the week to October 15, sharply up from 10.60 percent in the previous week, as prices of milk, eggs, fish, cereals and fruits soared.
Source : rttnews.com
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