The benchmark S&P BSE Sensex and Nifty Bank hit record highs on Monday, primarily due to a rally in banking stocks. The Reserve Bank of India has asked banks to begin insolvency proceedings against 12 large loan defaulters, raising investor hopes that this could start the resolution of bad loans.
After a strong opening, the BSE Sensex hit a high of 31,362.15, before closing at a new record high of 31,311.57, up 255.17 points. The 30-share index had lost 99.51 points in the previous two sessions.
The Bank Nifty hit a lifetime high of 23,800 in intra-day trade and closed at a record high of 23,742. The Sensex gained 255 points to hit a fresh high of 31,311.
“The market is back to buoyed sentiment due to the relaxation in the return filing timeline to minimise the impact of transition to GST,” said Vinod Nair, Head of Research, Geojit Financial Services Ltd.
“On the other hand, the RBI’s insistence that banks start bankruptcy proceedings, which will improve their asset quality and strengthen their balance sheets, led the index to climb by 1 per cent,” he added.
Banking stocks, led by SBI, Axis Bank, HDFC Bank and ICICI Bank, supported the rally. Among BSE sectoral indices, the metal index was the star performer and was up 1.89 per cent, followed by banking at 0.96 per cent.
The top five Sensex gainers were Adani Ports, Axis Bank, Power Grid , L&T and RIL.