Bank Nifty surges 9.30% as investors gave thumbs up to RBIs plans - GEPL Capital

Indian Markets gave a thumping welcome to the new RBI Governor. The BANK NIFTY surged by a mind boggling 9.30% as investors gave a thumbs up to RBI's swap plans intended to boost dollar supplies. The RBI has allowed banks to swap foreign currency deposits which could attract $10 bn of forex inflows in the next three months.

In another development, Lok Sabha passed the Pension Bill that paves the way for individuals to plan for their post-retirement needs and allows foreign investors to acquire up to 26% stake in the sector. Owing to these positive developments, pressure on the INR eased considerably and was trading around 66.4 per dollar.

Banks were on fire and rallied like mid-cap stocks while IT took a back seat due to strengthening of INR. Among the broader indices, it was banking written all over. The BSE BANKEX surged 9.30% while AXIS BANK (+15.63%) FEDERAL BANK (+12.38%) and YES BANK (+21.55%) reached dizzying heights.

BSE IT (-2.95%) was, expectedly, the worst performer today. NIFTY and SENSEX ended the day with gains of 2.22% and 2.26% respectively.

Asian markets were relatively quiet today with no major swings; viz. SHANGHAI COMPOSITE (-0.24%), NIKKEI (+0.08%) and HANG SENG (+1.22%). Markets were relieved as signs of a pick-up in growth in the US economy emerged. European indices opened in the red. Investors in Europe await policy decisions from the ECB and BoE.

Source : Equity Bulls

Keywords