The Sensex rose 176.26 points, or 0.52 per cent, to close at 33,969.64. The Nifty ended 61.6 points higher, or 0.59 per cent, at 10,504.80. (Picture for representational purpose)
Stock markets on Thursday staged a smart rally, as public sector banks (PSBs) soared after the government sought approval from Parliament to inject Rs 80,000 crore into the banking sector as part of its recapitalisation plan. Sustained foreign fund inflows and gains at most of Asian markets also boosted the sentiment.
The Sensex rose 176.26 points, or 0.52 per cent, to close at 33,969.64. The Nifty ended 61.6 points higher, or 0.59 per cent, at 10,504.80.
The rupee gained further strength, ending at a fresh 30-month high of 63.41 against the dollar on Thursday.
“Positive global cues and improvement in domestic service PMI data for December helped the market to move out of the subdued phase of trading. Global growth expectation and continued buying on metal stocks raised the market sentiment, while PSU banks outperformed on account of finalisation of recapitalisation. On the other hand, investors awaiting Q3 GDP data today to see any ease in GST and demonetisation-led disruption,” said a dealer.
Anand James, chief market strategist, Geojit Financial Services, said: “Release of the next instalment of funds earmarked for bank recapitalisation proved to be a shot in the arm for PSU banks, especially as some of the weak banks had been hauled up by the RBI for prompt and corrective action. FOMC minutes and firmness in global equity peers also helped, but with oil hovering around 62, markets were measured in its rise.”
On Wednesday, the government had cleared a capital infusion of Rs 7,577 crore into six weak PSBs — which are reeling under huge bad loans — as part of the its recapitalisation plan to clean their balance sheets. The boards of three banks on Wednesday approved the recapitalisation plan.
Shares of PSBs surged up to 8.5 per cent after the finance ministry sought Parliament’s nod for extra expenditure of Rs 80,000 crore towards their recapitalisation through bonds. UCO Bank soared 8.50 per cent, IDBI Bank surged 8.33 per cent, PNB gained 5.97 per cent, Bank of India went up 3.83 per cent and Bank of Baroda jumped 3.77 per cent on BSE. Oriental Bank of Commerce rose 3.71 per cent, Canara Bank advanced 2.69 per cent, Bank of Maharashtra (2.39 per cent), Indian Bank (1.89 per cent) and State Bank of India (1.72 per cent).
The rupee advanced as much as 13 paise to finish at a fresh 30-month high of 63.41 against the dollar at the interbank foreign exchange market on Thursday. The rupee opened down by 5 paise at 63.58.
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