Banking stocks cheered the Reserve Bank of India's move to cut the cash reserve ratio by half a percentage point with the sectoral index gaining over 3%.
Pursuant to the RBI policy announcement, the BSE banking index was the largest gainer among the sectoral indices.
At 12:01 hrs, the Bankex was trading up 335.79 points or 3.07%, compared just 1.43% gain the benchmark index Sensex.
Analysts said this is a good move by the central bank as after this initiative banks may reduce the interest rate to attract borrowers.
ICICI Bank, which has the highest weightage in the 14 stock banking index jumped more than 3% to touch a high of Rs 887. It was later trading at Rs 886, up 3.29% from its previous closing price on BSE.
Banking giant State Bank of India (SBI) climbed over 4.30% to a high of Rs 2,024.10. It was later quoted at Rs 2,014, up 3.78% from its last close on BSE.
Other major movers were HDFC Bank which was trading at Rs 492.50, higher by 1.78%, Axis Bank at Rs 1,023.75, (up 2.71%), Punjab National Bank at Rs 1,005.80 (up 4.75%), Bank of India at Rs 340, (up 6.72%), Kotak Mahindra Bank at Rs 493 (up 3.26%) and IndusInd Bank at Rs 287 (up 1.99%).
All the rate sensative sectors -- capital goods, auto and real estate were trading in the green and were the major movers today, which gained 2.72%, 0.90% and 2.26% respectively.