Reports claiming that the government would increase the foreign investment limits for banks took Dalal Street virtually by storm on Thursday leading to frenzied buying by market participants in banking stocks.
The unprecedented rally in bank shares also took the main indices of Bombay Stock Exchange and National Stock Exchange to new highs. However, late in the day profit-booking at higher levels in state run banks by traders brought indices down by more than half.

The Reserve Bank of India has confirmed that the government has been mulling such proposal to increase FDI in private sector banks from currently 74 per cent to 100 per cent for private lenders and from 20 per cent to 40 per cent in cases of state run banks.

HDFC Bank, Yes Bank, IndusInd Bank and other top PSBs were in the lead of Thursday’s rally, while the only subdued segment was metal stocks. The Bull run gathered speed right at the opening bell in D Street with 30-share Sensitive Index of BSE and 50-srip Nifty of NSE resuming with huge positive gap. The rally accelerated as buying spread to auto, FMCG and other select index heavyweights on uninterrupted liquidity influx.

Foreign Portfolio Investors (FPIs) were net buyers of equities worth `625.30 crore, while Domestic Institutional Investors (DIIs) purchased `168.61 crore worth of stocks. For second successive session, the market closed on a stronger note.

Sensex after rising to 35,507.36 (+425.44) points ended at 35,260.29 (+178.47) points, gaining 0.51 per cent. Nifty spiked to new record high of 10,887.50 (+98.95) points but lost ground in late deals ending at 10,817 (+28.45) points, increasing 0.26 per cent.

Bank Nifty was at new record high of 26,557.40 (+248.30) points, gaining 0.94 per cent. Bank Nifty peaked 26,887.65 (+598.55) in the morning before profit booking in lenders’ stocks set in. Nifty PSB ended in red on profit booking at 3,631.45 (-59.49) points , -1.61 per cent. In Sensex, 16 shares ended up and 15 down. For Nifty, the ration was 19:31.

Top gainers in BSE benchmark included ITC `273.90, 3.01 per cent, HDFC Bank `1,936.80, 2.42 per cent, M&M `759.65, 1.96 per cent and Kotak M Bank `1,046.70, 1.90 per cent. SBI was down 0.87 per cent at `302.70.

The BSE market capitalisation has zoomed beyond $1.02 trillion which analysts point out is five times more than the total value of Bitcoin Market and ten times the total worth of the world’s wealthiest man Jeff Bezos, the owner of Amazon.