Bank’s merger, aviation policy give Sensex a 331-point liftoff

MUMBAI: Driven by a rally in banking stocks on the back of an approval for SBI’s merger with its associate banks, the Sensex on Wednesday rose 331 points, or 1.3%,

MUMBAI: Driven by a rally in banking stocks on the back of an approval for SBI’s merger with its associate banks, the Sensex on Wednesday rose 331 points, or 1.3%, to close at 26,726.34, after four consecutive sessions of falls.

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The broader Nifty closed at 8,206.60, up 98 points, or 1.2%.

The evolving consensus among states with respect to the long-pending Goods and Services Tax, and the Cabinet clearing the new aviation policy, according to which airlines need not wait for five years to fly abroad, also boosted sentiment, said analysts.

Among banking stocks, SBI rose near 4%, while its associates — State Bank of Travancore, State Bank of Bikaner and Jaipur and State Bank of Mysore — hit the 20% upper-circuit limit.

The BSE banking index (bankex) jumped 280 points, or 1.4%. Except Axis Bank, most other banks gained. Kotak Mahindra Bank, Bank of Baroda, ICICI Bank, HDFC Bank, among other lenders, rose 1% to 2%.

Airline shares also rose. Spice Jet gained 3.51%, Inter Globe Aviation 1.90% and Jet Airways 0.21%.

The recent RBI measures to ease banks’ bad debt burden also had a positive impact .“This step coupled with the proposed NPA pricing committee for state-owned banks should help speed-up stressed-asset resolutions ,” said No mu ra analyst Adarsh Parasrampuria.