The BSE Sensex on Tuesday rallied by 154 points after Prime Minister Manmohan Singh assured that his government is determined to take “tough” decisions to reverse the rising fiscal deficit, amid oil prices falling below the USD 83 mark.
Helped by oil & gas, FMCG and banking stocks, the BSE benchmark index rebounded to close higher by 153.97 points or 0.92 per cent at 16,859.80. It had plunged 244 points on Monday as the RBI kept interest rates unchanged.
Oil & gas counters, led by Reliance Industries, spurted as crude dropped below USD 83 a barrel in Asia. ITC rose to lead the rise in the FMCG sector, which is perceived as a defensive bet in a volatile market.
Bank stocks like ICICI Bank, HDFC Bank and SBI also rose around 1 per cent each after taking a beating on Monday.
The 50-share National Stock Exchange index Nifty shot up by 39.60 points, or 0.78 per cent to 5,103.85 with stocks of refinery, FMCG and healthcare staging a smart recovery.
The market mood was also supported as Finance Minister Pranab Mukherjee in New Delhi said the government is taking steps to improve inflow of foreign investment.
A firming trend in European stocks as Greece moved towards forming a new government and a Spanish debt sale meeting targets fuelled the domestic rally with 23 stocks out of the 30-share Sensex closing higher.