Bank stocks rose after Finance Minister Arun Jaitley said that remonetisation situation in the country would soon reach to a comfortable position. Nifty Bank index climbed 0.62% to 19,636.3 points amid choppy broader markets.State Bank of India and Punjab National Bank – largest public sector banks – rose 2.71% and 2.88% respectively. Private lenders ICICI Bank and Axis Bank rose 1.08% and 0.75% respectively. HDFC Bank, however, was marginally down.
Jaitley, while presenting the Union Budget 2017, said that the surplus liquidity in the banking system – created after demonetisation – will aid in lower cost of lending & credit growth. Bank and finance companies have gained in the recent weeks on indications that the impact of demonetisation on the economy is not as bad as was expected earlier.
Earlier last month, RBI Governor Urjit Patel had said that the central bank had issued new currency notes worth Rs 9.2 lakh crore, against the Rs 14.5 lakh crore pulled out in demonetisation.
Broader markets continue to be cautious, on mixed announcements indicating focus on both rural spending and boosting incomes. BSE Sensex was flat at 27,655 points and NSE Nifty was down 0.05% at 8,556.8 points.