Bank Nifty posts biggest 1-day gain in 4-1/2 years as Rajan takes over

The BSE Sensex and the Nifty rose more than 2 per cent on Thursday as banking stocks saw their biggest single-day gains in over 4 years after the raised overseas borrowing limits for lenders in a slew of measures unveiled by new Reserve Bank of India (RBI) Governor Raghuram Rajan. The NSE bank index surged 9.5 per cent, marking its biggest single-day percentage gain since May 18, 2009, tracking a rally in the beleaguered rupee. Rajan kicked-off his term with a bang on Wednesday, announcing measures to support the embattled rupee and unveiling a raft of steps to liberalise financial markets and the banking sector. However, amid the euphoria over the new governor's energetic debut, investors warned he cannot by himself repair an economy mired by slowing growth and a record high current account deficit that has helped fuel a drop in the rupee of as much as 20 percent this year. Analysts say the near-term direction continues to depend on a potential tapering of the Federal Reserve's bond-buying programme, a possible U.S. military strike on Syria and the Reserve Bank of India's policy review on September 20. "So much rise on a new central bank governor is nice but the ground realities of elections, Fed taper, Syria would continue to dominate the market in the near term," said G. Chokkalingam, managing director and chief investment officer, Centrum Wealth Management. The BSE Sensex rose 2.22 per cent, or 412.21 points, to end at 18,979.76, marking its second consecutive day of gains. The broader Nifty ended 2.66 per cent, or 144.85 points, up at 5,592.95, after rising as much as 3.3 per cent. ICICI Bank rose 9.3 per cent, while Axis Bank surged 15.7 per cent. Among state-owned banks, State Bank of India rose 9.6 per cent, while Bank of Baroda ended 8 per cent higher. In midcap banks, Yes Bank surged 21.8 per cent, while Kotak Mahindra Bank rose 8.8 per cent. Among non-banking finance companies, Housing Development Finance Corporation and LIC Housing Finance rose 5.8 per cent each. Among stocks that fell, IT shares slumped as the rupee jumped as much as 2.3 per cent. Profit-taking was seen in Tata Consultancy Services and Infosys after both stocks made their record highs on Wednesday. TCS fell 3.8 per cent, while Infosys lost 3.5 per cent and HCL Technologies ended 1.9 per cent lower. . Copyright Thomson Reuters 2013

Bank Nifty posts biggest 1-day gain in 4-1/2 years as Rajan takes over

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