Sensex vaults 575 pts as US extends Iran oil sanctions waivers

Indian stocks ended a three-week losing streak and surged 575 points as buyers returned to market after crude oil prices fell and the US state department announced an extension of sanction waivers for most of Iran's crude buyers, including India.

Benchmark WTI and Brent crude oil prices fell after Iran agreed to limit its controversial atomic programme to get some relief from Western sanctions, raising the possibility that curbs on its oil exports would soon be lifted.

The US state department today announced a six-month extension of the waiver of sanctions on China, India, South Korea and other countries on purchase of crude oil from Iran after that country agreed to curb its nuclear programme under an interim deal with major world powers.

The United States and five other global powers, known as the P5+1, agreed in Geneva this month also gave Iran`s access to about $4.2 billion in foreign currency reserves for six months.

The waivers, which the US counts as exceptions, allow banks in the consuming countries to make payments against crude bought from Iran without being cut off from the US financial system for the next six months.

Iran's oil exports will still be held at about 1 million barrels per day, as per average sales for the year.

Iran`s oil shipments were about 2.5 million bpd in the beginning of 2012, before US and European sanctions took effect.

An improvement in India's GDP growth data for the July-September quarter, released after trading hours on Friday, also helped boost sentiment.

The market was volatile during the week as traders rolled over positions in the futures and options segment from the near month November series to December. The November contract expired on 28 November.

Shares of capital goods, banking, auto, power, PSU, realty, metal and FMCG sectors firmed up sharply on robust buying support.

The Bombay Stock Exchange sensitive index, Sensex, opened higher at 20,326.66 and shot up further to 20,819.77 before concluding at over one-week high of 20,791.93, posting a sharp gain of 574.54 points, or 2.84 per cent, over the previous week's close.

The 30-share BSE benchmark index had lost 979.42 points, or 4.62 per cent, in the last three weeks.

The NSE 50-share Nifty also rose by 180.65 points, or 3.01 per cent, to 6,176.10. The key index had lost 311.75 points, or 4.94 per cent, in the last three weeks.

Persistent capital inflows from foreign funds also boosted the market sentiment. Foreign institutional investors (FIIs) bought shares worth Rs1,317.16 crore during the week, including the provisional figure of 29 November, as per the data issued by the exchanges.

As many as 26 out of the 30 Sensex scrips ended with gains while the rest logged losses, reflecting a broad-based buying.

The Indian rupee also gained for the second week following sustained dollar selling by exporters and some banks amid firm local equities, closing higher by 43 paise at 62.44 against the greenback.

Weak dollar overseas also aided the rupee rally while sustained foreign funds inflow restricted the rise to some extent.

At the interbank foreign exchange market, the domestic unit commenced higher at 62.67 a dollar against the previous week's close of 62.87 and immediately touched a low of 62.70.

However, it met with strong resistance and bounced back to a high of 62.14 before concluding the week at 62.44, showing a rise of 43 paise or 0.68 per cent.