Debt-stricken country Greece, which received a bailout of 110 billion euro last year from European Union and IMF, needed a second loan agreement to meet its payments. Its contagion was gradually scattering to its neighboring nations – Italy and Spain.
An emergency summit of the eurozone's 17 member countries came out with the another rescue package for Greece worth 109 billion euros ($155 billion). Along with this, banks have agreed to take part in several programs to lighten the burden of Greece"s debt, including plans that would exchange existing bonds for new bonds with lower interest rates and longer maturities.
New loans to Greece will have a maturity of 15 to 30 years — up from 7.5 years in last year"s bailout — while the interest rate will fall from 5.5-6 per cent to about 3.5 per cent. The concessions will also be available to Ireland and Portugal.
A “debt buy-back programme" should reduce Greece"s debt burden by 12.6 billion euros, the leaders said.
This step boosted Indian stock market and Indian IT stocks such as Wipro, TCS, Infosys and Larsen & Toubro, gained as much as 0.7% - 1% in the beginning of the trade.
BSE Sensex was seen up by 276.87 points at 18,713.06 around 12:30 pm IST. And, S&P CNX Nifty was seen up by 78.30 points at 5620.60 same time.
Wipro, India's third-largest software services provider was trading at Rs 405, 1.02% higher on BSE Sensex at the same time.
TCS was seen at Rs 1,136.55, 1.24% higher on BSE Sensex.
Infosys, India's second largest software provider was trading at 1.09% higher at Rs 2,820.
Larsen & Toubro (L&T), also edged higher and was trading at 1,817.50, 1.53% up.
Indian IT firms get a quarter of the sales from Europe and markets are reacting positively to the global cues.