Mumbai: The banking index of the Bombay Stock Exchange today surged as much as 8% in early morning trade after the government won the confidence vote with absolute majority and said it will go ahead with its unfinished economic reforms agenda.
The Banking index today opened firm at 6,961.81 points, a jump of 332.83 points over its previous close of 6,628.98 points.
Marketmen said the surge in the banking index was largely due to the positive sentiments in the market as corporate India believes the win in the trust vote would give a boost to the government for furthering its much-awaited reforms agenda.
“With 275 votes, this government has an absolute majority and this is a confidence to go forward,” finance minister P Chidambaram had said after the trust vote yesterday.
The 17-share index touched an intra-day high of 7,191.98 points and was quoted at 7,159.86 points at 10 am, a change of 531 points or over 8% against yesterday’s closing figure.
Crucial legislations in insurance and banking sectors and bills for setting up of a pension regulatory body and one for unorganized sector had been pending following opposition from the Left parties that were till recently providing outside support to the UPA government.
Among the constituents of the banking index, ICICI Bank surged over 9%, State Bank of India jumped 6.60% and HDFC Bank rose nearly 8%.
Meanwhile Axis Bank was up 6.54%, Kotak Bank up 9.25%, Punjab National Bank up 5.16% and Bank of India up 5.63%.
“The government will be approaching other members who are not opposed to economic and social reforms and so we will move ahead with the reforms,” Chidambaram had said.