Sensex scales 33000 after Arun Jaitley’s talk

Mumbai: The equity markets bounced back sharply on Thursday led by public sector banks after finance minister Arun Jaitley hinted about more consolidation in state owned lenders.

Speaking at the Asia Pacific summit organised by Morgan Stanley in Singapore, Mr Jaitley said that one or two instances of consolidation in state owned banks could be expected over the next twelve months. The NSE PSU Bank index soared 3.22 per cent, which helped the Nifty to stage a smart rally from its recent lows.

While the 50-share Nifty surged 96.70 points or 0.96 per cent to close at 10,214.75, the BSE Sensex soared 346.38 points or 1.06 per cent to end the session at 33,106.82.

The shares of most of the PSU banks posted im-pressive gains on Thursday in the range of 3-6 per cent. Bank of India was the biggest gainer, up 6.23 per cent whereas shares of other PSU banks such as Union Bank, Indian Bank, Allahabad Bank, Oriental Bank and Punjab National Bank jumped over 5 per cent on the National Stock Exchange (NSE).  

However, market analysts are still not convinced about the rally as foreign portfolio investors (FPI) are yet to turn net buyers of domestic equities and most of the technical indicators are still pointing towards further weakness ahead.

“Finally, our markets snapped the recent losing streak and have managed to recover a fair bit of ground from their previous session’s low. But still the question remains, whether this is a beginning of new up move or it’s just a relief rally. In our sense, this probable is just a breather as we can see multiple technical tools still holding on to their negative postures,” said Sameet Chavan, chief technical analyst at Angel Broking.