Sensex jumps over 400 pts on EU summit

SENSEX-JUMPS-ON-EU-SUMMIT:Sensex jumps over 400 pts on EU summit

 REUTERS - The Sensex extend gains to 2.5 percent on Friday and are heading towards its biggest monthly gains since Jan, after European leaders unveiled a plan to address Europe's distressed banking sector, easing some of the concerns about the region.

India published draft guidelines on Thursday to implement rules that target tax evasion but have provoked an outcry among foreign investors at a time when the country needs capital inflows.

Also a strong rebound in the rupee now at 56.02 adds investor comfort, had closed at 56.80 rupees.

Also Morgan Stanley raised Indian stocks to "equalweight" after being "underweight" since the first quarter of 2011, citing historically attractive valuations.

The upgrade came at a time when India's Prime Minister Manmohan Singh took charge of finance ministry on Tuesday and said will take steps to revive economic growth.

The Sensex gains 2.42 percent to be at 17403.46, highest level since May 2.

The Nifty also adds 2.36 percent.

Banks, infrastructure shares were leading the gains while some auto shares gained after announcement of reduction in petrol prices by 2.46 rupees per litre.

ICIC Bank rises 4.4 percent, State Bank of India gains 3.2 percent while Larsen & Toubro rose 4 percent

Bajaj Auto advances 1.3 percent while Hero Motocorp adds 3.13 percent.

Maruti Suzuki India gains 4.5 percent after Jefferies upgraded it to "buy" from "hold" and raised target price to 1,446 rupees from 1,398 rupees.