The Indian stock market has risen handsomely aided by PSU companies on hopes that the government may infuse some capital into the sector as early as the third quarter.
Sensex is up 512.01 points or 1.37 percent at 37,900.67, and the Nifty jumped 154.90 points or 1.4 percent at 11,205.20.
The Finance Ministry is likely to provide capital support from the Rs 20,000 crore fund approved by Parliament in recently concluded session to some Public Sector Banks (PSBs) in the third quarter itself.
Parliament approved Rs 20,000 crore for PSB capital infusion as part of the first batch of Supplementary Demands for Grants for 2020-21 which sought additional spending of a record Rs 2.35 lakh crore primarily to meet expenses for combating the COVID-19 pandemic.
The fund infusion would be for meeting regulatory capital requirements if the need arises in the October-December quarter, sources said.
Among the sectors, the S&P BSE Bankex added over 2 percent led by IndusInd Bank which jumped 6 percent followed by Federal Bank, Axis Bank and Bandhan Bank which gained over 4 percent each. The other gainers included ICICI Bank, RBL Bank, State Bank of India and Kotak Mahindra Bank.
Nifty PSU Bank gained almost 3 percent led by Bank of India and Indian Bank which jumped over 4 percent each followed by Punjab National Bank, Canara Bank and Bank of Baroda.