Short covering push Sensex 147 points higher on global cues

After a consolidation since Friday, the market moved into upward direction in the second half of trade on Tuesday led by short covering, tracking positive global cues. Heavyweights Reliance Industries, TCS, NTPC, SBI, Infosys, Bharti Airtel, ITC and L&T led the market higher.

The 30-share BSE Sensex gained 146.83 points or 0.79%, to close at 18,653.87 and the 50-share NSE Nifty went up 46.50 points or 0.84%, to settle at 5,613.55.

Even global markets rebounded today but investors still looked nervous ahead of euro zone summit to be held on Thursday. There could be possibility of second bailout for Greece in this summit to stop spreading debt crisis to other countries like Italy and Spain.

United States Treasury Secretary Tim Geithner told CNBC that he is certain that a deal will be struck to raise the federal debt ceiling prior to the August 2 deadline to avoid default. Recently rating agencies S&P and Moody's had put the US credit rating under review for a downgrade.

European markets like France's CAC and Germany's DAX were trading 1-1.5% higher. Britain's FTSE, Dow Jones futures and Nasdaq futures gained 0.5% each.

Robert Parker, Senior Advisor at Credit Suisse said the US budget deficit is the biggest risk factor at the moment for global markets, hand in hand with the European crisis. He, however, doesn't see the possibility of another double-dip recession.