Sensex leaps 463 points on FII buying, banks

Thanks to a change in foreign institutional investors’ stance, Indian stocks surged for the second day in a row. After lapping up over ₹3,000-crore worth shares on Tuesday, FIIs added ₹1,437.50-crore worth shares on Wednesday, encouraged by the regulatory fillip to the financial sector and the government’s commitment to keep to the 3.5 per cent fiscal deficit target.

Till February 29, FIIs were net sellers to the tune of ₹16,250 crore for 2016.

Domestic institutions, however, offloaded equities worth ₹593.67 crore on Wednesday.

7-13 per cent gain The day, however, belonged to banking stocks, which pulled up the benchmark Sensex by 1.95 per cent (463 points) to close at 24.242.98 and the Nifty by 2.03 per cent to 7,368.85.

India’s largest lender State Bank of India, the biggest beneficiary of RBI’s largesse, shot up 12.56 per cent on the NSE, closing at ₹172.50. Bank of India, ICICI Bank, Punjab National Bank and Canara Bank all gained over 7 per cent each in just a single trading session. Comparatively, other sectors remained rather muted, with metals and infrastructure sectoral indices making marginal gains.

Soumya Kanti Ghosh, Chief Economic Advisor, SBI, believes at least a 25-basis-point repo rate cut is almost a given at the next policy review on April 5. “Because of that,” he added, “right now, there is more upside to the market than down.”