Bank stocks rally sharply

Mumbai, May 17 | Updated: May 18 2006, 05:30am hrs
The news of Lok Sabha amending the RBI Act and giving more powers to the apex bank with respect to controlling fund flows was greeted with cheers by market participants on Wednesday. The bank stocks were in limelight at the fag end of the session as the news of RBI Act amendment trickled into the market. The BSE Bankex ended the day with a gain of 3.18%, or 172.48 points, at 5,588.03 as against BSE Sensex' gain of 2.90 %, or 344.08 points, at 12,217.81.

The majority of the bank stocks went up at the bourses. According to an analyst from a domestic brokerage firm, the bank stocks rallied with the expectations that the new amendment would help the RBI to fix the limit of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) as per the market situation. Also, several steps have been taken for the development of the derivatives market in the RBI Bill.

The Bankex opened at 5,459.31 points in the morning. It went to a high of 5,837.47 and touched a low of 5,459.31, an intra-day difference of 378 points. A total of 0.48 crore shares, with a cumulative value of Rs 127.54 crore, were traded. State-owned Dena Bank was the highest gainer among the bank stocks. It went up by 9.59%, or Rs 3.40, to Rs 38.85. The other major gainers were Allahabad Bank, which went up by 5.69%, or Rs 4.85, to close at Rs 90.10, Bank of India went up by 4.56 %, or Rs 6.30, at Rs 144.50, Bank of Baroda rose by 5.59%, or Rs 14.20, at Rs 268.35 and Centurion Bank of Punjab shot up by 4.78%. Punjab National Bank went up by 6.87%.