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Wednesday, March 16, 2011

Bank stocks shine ahead of RBI policy

Mumbai: The interest-sensitive financial sector stocks, led by ICICI Bank, recorded sharp-to-moderate gains on the Bombay Stock Exchange today as buyers discounted a likely hike in key rates by the Reserve Bank of India.
Strong Advance tax numbers, which indicated corporate earnings growth was on track, also supported the trading sentiments.

Mirroring the upbeat mood, the BSE banking sector index emerged as the second best performer among sectoral indices by rising 261.67 points, or 2.15 per cent higher at 12,438.34 points, helping th BSE benchmark index Sensex to close 191.05 points up, or 1.05 per cent, at 18,358.69 points.

Stocks of State Bank of India, country's largest lender, rallied by 3.10 per cent to Rs 2,642.85 and Punjab National Bank rose 1.50 per cent to Rs 1,096.25.

Largest lender in the private sector, ICICI Bank spurted by 3.03 per cent to close the session at Rs 1,026.60, while Axis Bank gained 2.85 per cent to close at Rs 1,317.65 on BSE.

Brokers said expectations that the RBI may raise key rates by 25 basis point to curb inflation in its monetary policy tomorrow, which is lower than earlier anticipated, triggered buying interest in financial stocks.

In addition, reports of strong advance tax numbers, indicating strong corporate growth also buoyed the trading sentiments, they said.

Other gainers were Bank of India up by 1.20 per cent to Rs 464.40, Canara Bank by 4.08 per cent to Rs 634.45, Bank of Baroda by 1.08 per cent to Rs 909.35, Yes Bank by 4.95 per cent to Rs 278.65, IndusInd Bank by 1.25 per cent to Rs 247.85

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