Sensex closes off day's high; M&A target banks rally

Moneycontrol Bureau

Key equity benchmarks closed firm, but off day's highs on Wednesday, as the passage of the Banking Amendment Bill lifted sentiment.

The 30-share Sensex closed at 19,476, up 111.25 points after touching a high of 19,516.02 earlier in the session. The 50-share Nifty closed at 5,929.60, up 32.80 points after hitting 5,939.40 intra-day.

Private banks perceived as likely acquisition targets once RBI issues the final guidelines for banking license, were the star performers of the day. Federal Bank, Karnataka Bank and Dhanlaxmi Bank gained 3-6%. Barring these exceptions, investors were not too excited about the sector in general as the widely held view is that much of the positives from the amended rules have already been priced in.

Banking license hopefuls like L&T Finance and Bajaj Finance began the day on an upbeat note, but gave up much of their gains towards close of trading. M&M Financial Services was an exception to the trend, gaining over 2%. Brokers said the run up in these stocks over the last few weeks had made most of them expensive.

Sectorwise, auto, healthcare and metal shares did well. Investors shunned shares from the FMCG and capital goods sectors.