An announcement by US President Barack Obama, that the Democrats and Republicans have reached a deal to raise the country's debt ceiling, triggered optimism into the markets. The Dalal Street rose over 1 per cent and the broader Nifty index gained over 50 points to take out the crucial 5,550 levels in opening trade.
At 0934 hours, the Sensex had given up some gains and was trading at 18,384, up 187 points and the Nifty advanced 53 points to 5,535.
According to the agreement, at least $2.4 trillion would be cut in federal spending over a decade, but no taxes would be raised. All Asian stocks surged on the deal news with Japan’s Nikkei leading the advances, rising nearly 2 per cent.
Barring metal stocks, all sectoral indices were trading higher. Banks, realty and IT stocks surged over 1 per cent. Auto stocks also rose nearly 1 per cent.
Metals were down after the SC's decision to ban all mining activity in Bellary district of Karnataka. However, some stocks that tanked on Friday, after being named in the Lokayukta report, bounced back strongly. Adani Enterprises jumped 7 per cent. Among the laggards, JSW Steel plunged 9 per cent, showing weakness for a third consecutive day.
On the Sensex, 29 of the 30 stocks were trading higher. ICICI Bank was the top gainer, rising nearly 2 per cent. Hindalco, RCom, DLF, HDFC and Infosys advanced 1.5-2 per cent. JSPL was the sole loser, falling 2.5 per cent.
86 per cent stocks were trading higher on the broader BSE 500 index indicating strength in the markets.
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