Banking stocks on Tuesday rebounded as much as 5 per cent as the government allayed fears of a global financial crisis affecting the domestic market, saying that the Indian banks were well regulated.
Led by ICICI Bank, shares of all major lenders shot up in the range of 5-8 per cent on the Bombay Stock Exchange. Finance Minister P Chidambaram on Tuesday asked people not to give in to unfounded apprehensions, adding that all Indian banks are well-capitalised and regulated.
“I think that some people are giving credence to rumours and unfounded apprehensions,” the finance minister said. “I maintain and I repeat all our banks are well-capitalised and well regulated.”
The BSE bankex settled at 6,478.85 points, up 303.75, or 4.92 per cent, after touching an intra-day high of 6,561.64.
The BSE banking index recovered after CB Bhave, chairman, SEBI, assured that there is no need for panic in Indian market and said, “...We are monitoring the situation closely.”
Shares of ICICI Bank settled at Rs 534.85, up 8.42 per cent. The scrip had touched an intra-day high of Rs 550.60.
Marketmen said the positive cues came after government assured that there is no need for panic even though global bourses including Asian markets suffered heavy losses.
Country's largest lender State Bank of India rose 4.32 per cent to close at Rs 1,465.65. The scrip had touched a intra-day high of Rs 1,483 and over 10. 83 lakh shares changed hands.
Secretary Department of Economic Affairs Ashok Chawla said on Tuesday the government does not expect stock markets to fall below the levels seen on September 29.
Other major PSU lenders like Punjab National Bank also closed in the black.