Banking stocks are in demand and trading higher by up to 10% in noon deals on the Bombay Stock Exchange (BSE).
Bank of Baroda, South Indian Bank, Indian Bank and Oriental Bank of Commerce have rallied more than 5% each, while Federal Bank, IDBI Bank, Punjab National Bank, Canara Bank, Bank of India, Jammu and Kashmir Bank, Union Bank of India and Syndicate Bank are up nearly 4% each.
At 1455 hours, the BSE banking share index S&P BSE Bankex was up nearly 3.2% compared to a 1.2% gain in the broader S&P BSE Sensex.
Most analysts have upgraded the banking sector to Neutral from Negative earlier on signs of a slight economic turnaround.
The economy is witnessing signs of stabilization, with growth bottoming out, Indian rupee and inflation coming under control and current account deficit (CAD) improving.
The government's effort to kickstart the investment cycle and corporate deleveraging, which is under way, point at gradual improvement in loan growth and better asset quality. However, a stable government at the center, post elections, is a key, said an analyst at Motilal Oswal Securities in a note. An improvement in economic environment and a stable government could lead to re-rating in banking stocks, the analyst added.
Among individual stocks, Indian Bank has surged 10% to Rs 130 on the BSE. Lakshmi Vilas Bank has rallied 7% to Rs 78, while South India Bank and Union Bank of India are up 6% each at Rs 24 and Rs 147 respectively.
Bank of Baroda, South Indian Bank, Indian Bank and Oriental Bank of Commerce have rallied more than 5% each, while Federal Bank, IDBI Bank, Punjab National Bank, Canara Bank, Bank of India, Jammu and Kashmir Bank, Union Bank of India and Syndicate Bank are up nearly 4% each.
At 1455 hours, the BSE banking share index S&P BSE Bankex was up nearly 3.2% compared to a 1.2% gain in the broader S&P BSE Sensex.
Most analysts have upgraded the banking sector to Neutral from Negative earlier on signs of a slight economic turnaround.
The economy is witnessing signs of stabilization, with growth bottoming out, Indian rupee and inflation coming under control and current account deficit (CAD) improving.
The government's effort to kickstart the investment cycle and corporate deleveraging, which is under way, point at gradual improvement in loan growth and better asset quality. However, a stable government at the center, post elections, is a key, said an analyst at Motilal Oswal Securities in a note. An improvement in economic environment and a stable government could lead to re-rating in banking stocks, the analyst added.
Among individual stocks, Indian Bank has surged 10% to Rs 130 on the BSE. Lakshmi Vilas Bank has rallied 7% to Rs 78, while South India Bank and Union Bank of India are up 6% each at Rs 24 and Rs 147 respectively.