Tuesday, May 28

Indian Banking Shares Surge On Government’s $32.4B Recapitalisation Plan

Indian banking shares soared on Wednesday, sending indexes to record highs after the cabinet approved a $32.43 billion plan to recapitalise its state banks over the next two years, although bonds fell given the injection will be funded with debt.

State Bank of India, the biggest lender, rose more than 20 percent, while Punjab National Bank, the second biggest state-run lender, surged more than 33 percent.

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The benchmark NSE Nifty rose as much as 1.3 percent to a record high of 10,340.55, while the BSE Sensex climbed as much as 1.6 percent to a record high of 33,117.33.

Bonds fell, with the benchmark 10-year bond yield up 3 basis points to 6.81 percent from its previous close.