Markets end near day's high, Sensex up 500 points

Markets extended yesterday’s gains following global rally after a decision by International Energy Agency to increase oil supplies and a resolution over Greece debt crisis.

Nifty made a gap up opening and moved higher after oil prices eased, relieving concerns of inflation. The index touched a high of 5,477 in the afternoon session led by rally in heavyweight ICICI Bank, Infosys and Larsen & Tourbo. The S&P CNX Nifty closed near day’s high at 5,470, up 150 points and the Sensex ended at 18,234, up 506 points (Provisional).

--------------------Updated 14:30 hrs

The International Energy Agency (IAE) decided to turn on the oil spigot and release 60 million barrels driving down crude prices to four month lows which caught investors off guard and spurred a rally across financial markets. Brent Crude fell 6% to $107.5/bbl and Nymex crude dropped to $91/bbl.

Additionally Greece government also agreed with European Union and International Monetary Fund on a five year austerity plan easing concerns of debt crisis.

In Asia, markets ended higher. Japan's Nikkei Stock Average rose 0.9%, South Korea's Kospi Composite gained 1.7%, China's Shanghai Composite Index rose 2.2% and Hong Kong's Hang Seng Index climbed 1.9%.

While the Indian markets joined the global market rally, analysts recommend retail investors to be cautious as this could just be a dead cat bounce – temporary recovery from a prolonged decline and investors may get caught on the wrong foot. Also fundamentally things have not changed much as political stalemate in Delhi is still on and Reserve Bank of India would continue its tightening measures until there are clear signs of inflation easing.

BSE Realty index was the top gainer, up 3.8%. Sobha Developers added 10.7%, Indiabulls Real Estate advanced 6.1% and HDIL increased 5.7%.

BSE Consumer Durables Index was the top losers, down 1.8%. Titan Industries slipped 5.2%, Whirlpool was down 0.5% and Rajesh Exports was down 0.4%.