Bank stocks rose on Wednesday after the finance minister P Chidambaram hinted at speedy implementation of banking sector reforms. Most bank stocks, especially public sector banks (PSBs), saw huge demand. The Bankex of the Bombay Stock Exchange (BSE) was among the biggest gainers among sectoral indices.
Dealers said Chidambaram’s statement is seen as a big positive indicator for the banking sector. Bankex gained 662.52 points, or 9.99%, before closing at 7,291.50 points. The 17-share index moved in a range of 370 points, touching a high of 7,331.96 points and a low of 6,961.81 points before settling at 7,291.50 points.
Mangesh Kulkarni, banking analyst at Almondz Global Securities, said, ?The valuations of some of the state-run banks were really compelling. Investors are also anticipating Parliament to clear the pending insurance bill.? There was also vast short-covering in the bank stocks on Wednesday that led Bankex to end in positive terrain. All the 17 constituents in Bankex ended in positive zone.
ICICI Bank rose to Rs 738.25, gaining Rs 76.95, or 11.64%. The major gainer was YES Bank that rose Rs 20.10, or 16.76%, before closing at Rs 140. HDFC Bank gained Rs 105.35, or 9.57%, and ended the day at Rs 1,205.75. State Bank of India (SBI) gained Rs 146.10, or 10.45, and closed at Rs 1,543.80. In the past one week, Bankex has gained 1,891.26 points, or 35.02%.