The benchmark Sensex crossed the 33,000-mark for the first time ever on Wednesday as banks and infrastructure stocks gained new highs on account of the capitalisation plan announced by the government on Tuesday.
The 30-share Sensex gained 435.16 points or 1.33% to close at 33,042.50, after touching an intra-day high of 33,117.33. The broader Nifty of the National Stock Exchange (NSE) ended the day at 10,295.35, up 87.65 points or 0.86%.
Banks, especially government-owned, were in the limelight with sector behemoth State Bank of India (SBI) gaining nearly 28% or ₹70.20 to close at ₹324.70. It touched a new 52-week high of ₹328 and was the top gainer among the Sensex pack. SBI was followed by ICICI Bank that gained 14.69%.
Other banking majors such as Bank of Baroda, Punjab National Bank, Bank of India and Union Bank, among others also witnessed double-digit gains in the stock prices on Wednesday. Incidentally, the Nifty PSU Bank index soared nearly 30% in a day gaining nearly 1,000 points.
On Tuesday, the government announced a massive recapitalisation plan for public sector banks (PSBs) worth ₹2.11 lakh crore. Of this amount, ₹1.55 lakh crore would be raised through recapitalisation bonds. Another ₹76,000 crore would be available from budgetary support and raised through market borrowings.
This has led to most analysts taking a bullish view on the sector that has been grappling with concerns related to bad debts and loan recovery.
In a note issued on Tuesday, Morgan Stanley said that all state-owned banks “are likely to go up meaningfully” in the near-term while adding that banks can “take the required hits, make proper provisions, and move ahead.”
Infra stocks
Infrastructure stocks were also in the limelight as the government said that about 2,000 kilometre of coastal roads will be constructed in Phase I of Bharat Mala. Stocks such as Sadbhav Engineering, L&T, BHEL, Siemens and ABB registered significant gains.
