The government has infused capital of Rs 1,260 crore in Bank of Baroda, Rs 870 crore in Punjab National Bank, Rs 570 crore in Canara Bank, Rs 460 crore in Syndicate Bank and Rs 140 crore in Dena Bank, the banks said in separate filings to BSE on Wednesday.
BSE Bankex jumped 1.5 percent as country's largest lenders State Bank of India, ICICI Bank, HDFC Bank and Axis Bank surged between 1-1.7 percent. Housing finance company HDFC rose 1.76 percent.
Banks cheered the move as the overnight borrowing rate dropped to 9 percent from 9.5 percent. YES Bank and IndusInd Bank gained the most among largecaps, rising 6-7 percent followed by Kotak Mahindra Bank and Axis Bank with 3.5 percent gains.
After taking over as the 23rd Governor of the central bank, Raghuram Rajan laid out a detailed road map for his innings in the short term, which he called a "big initial package."
BSE Bankex rallied more than 5 percent to 11041.46, continuing previous day's upmove as country's largest lender State Bank of India gained over 5 percent. Private sector lenders ICICI Bank, HDFC Bank and Axis Bank were up 3-6.5 percent.
Bank stocks are usually the biggest reflection of economic reality. If things on the horizon look dicey, these are the first ones to feel pressure.
Reacting to European credit crisis and choppiness in the rupee, the Nifty decisively breached the 4,700 mark today and the Sensex slipped 385 points to 15,679.