Mumbai: Indian equities opened strong on Monday and were in positive territory mid-afternoon with Prime Minister Manmohan Singh assuring industry leaders that Indian banks were safe and the government will take all necessary steps to keep the economy protected from the global financial turmoil.
The markets opened strong with a key equity index more than 400 points higher than its previous close Friday following the weekend rate cuts announced by the central bank to lower the cost of borrowings for commercial banks and its steps to infuse additional liquidity.
Mid-afternoon the benchmark 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) was at 10,134.50, up 346.44 points or 3.54 per cent from its previous close Friday last week at 9,788.06 points.
The Sensex opened at 10,209.37, up 421.31 points or 4.3 per cent from its previous close and reached an intra-day high of 10,358.63 before dipping somewhat on profit-booking at higher levels to rule at its current value.
The broader-based 50-share S&P CNX Nifty too opened strong and mid-afternoon it was at 2971.00 points, up 85.4 points or 2.96 per cent from its previous close Friday last week at 2885.60 points.
Mid-afternoon the BSE midcap index was ruling at 3,310.47, up 110.45 points or 3.45 per cent from its previous close Friday last week at 3,200.02 points.
The BSE smallcap index was ruling at 3,896.57, up 131.46 points or 3.49 per cent from its previous close at 3,765.11 points.
Out of the scrips that make up the Sensex only five were in the red mid-afternoon while all the others were in positive territory.
The fact that both midcap and smallcap indices were in the green indicated that there was some depth in the positive sentiments, analysts said.
The market mood was upbeat on account of the cuts announced by the Reserve Bank of India (RBI) on Saturday in the repo rate, the statutory liquidity ratio and the cash reserve ratio.
The surprise step will not only lower the cost of borrowings for commercial banks and, in turn, reduce interest rates for households and the corporate sector alike, but also infuse additional liquidity worth Rs 400 billion into the system.
The upbeat mood continued following the Prime Minister's positive outlook at his meeting with top industry leaders.
Overseas markets such as the New York Stock Exchange (NYSE) and the Nasdaq also closed with gains Friday last week with the NYSE index up 1.44 percent and the Nasdaq index up 1.32 percent.
The key Asian market Hong Kong Stock Exchange was also in the green Monday morning with the Hang Seng index up 2.69 per cent mid-afternoon India time.
Only the Nikkei index of the Tokyo Stock Exchange was 5.01 per cent in the red.
Analysts felt Indian equities markets should end in the green Monday.
Meanwhile, as per reports from Vienna, the price for crude oil produced by the Organization of the Petroleum Exporting Countries (OPEC) fell to $57.65 Friday, the oil cartel said on Monday.
One barrel (159 litres) of OPEC crude cost $2.27 less on Friday than on Thursday, when it stood at $59.92.
The price of OPEC oil has fallen 60 per cent since the start of July, when it stood at $140.73.
OPEC calculates an average basket price based on 13 important brands produced by its members.
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