ensex Surges 400 Points as Bank Stocks Gain Ahead of PM Modi-Bankers Meet

The BSE Sensex rose more than 400 points on Friday, helped by gains in banking stocks ahead of the meeting of PSU bank chiefs with Prime Minister Narendra Modi. A survey showing manufacturing activity expanded at its fastest pace in two years in December also boosted the market sentiment.

PM Modi will interact with chiefs of public sector banks at a retreat on Saturday to brainstorm over reforms in the banking sector. The bankers’ retreat, called “Gyan Sangam”, began in Pune today.

On hopes of faster reforms in the sector, banking stocks index, Bank Nifty, rose as much as 1.94 per cent to a record high of 19,113.50, surpassing the previous peak of 18,923.60 hit on December 23.

The HSBC Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, rose to 54.5 in December from 53.3 in the previous month, its highest since end-2012, as new orders flooded in and factories kept price increases to a minimum.

Investors expect the Narendra Modi-led government to continue with the reforms process while fresh buying is seen ahead of the December-quarter earnings.

The quarterly earnings season kick starts with Infosys results on January 9.

“People have started building positions ahead of the Budget. Overseas investment flow is again expected to be firm. The recent correction has provided valuation comfort. We expect the momentum to continue,” said Suresh Parmar, head, institutional equities at KJMC Capital Markets.

As of 1.41 p.m. the benchmark BSE Sensex gained 1.50 per cent to 27,919, while the broader Nifty added 1.49 per cent to regain 8,400 mark.

JSPL was the top gainer in Nifty, up 4.5 per cent followed by HDFC and Asian Paints, which were up 3.9 per cent and 3.5 per cent respectively.

State Bank of India gained 1.16 per cent, ICICI Bank added 2.7 per cent, and Axis Bank rose 2.3 per cent.

Bhel advanced 2.8 per cent after the company bagged an Rs 3,810 crore order from Telangana government.