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Government booster for banks lifts stock markets to new high; investors gain 2 lakh crore

After the government announced the bank recapitalization scheme for a massive Rs 2.11 lakh crore, the stock markets gained significantly today. The BSE Sensex registered the highest gain in a single day in the last five months. Nifty also registered similar gains. Both Sensex and Nifty ended on a new high, with the Sensex closing at 33,042.50 and Nifty at 10,295.35. It was a profitable day for investors, as they gained nearly Rs 2 lakh crore, as a result of rise in prices of various stocks. BSE’s total market capitalization increased from Rs 1,39,83,014.84 crore to Rs 1,41,79,644.23 crore. Almost 50 percent of the gains came from public sector banks that will be benefitting from the recapitalization scheme announced by the central government.

The biggest gainers were SBI and four other public sector banks. Taken together, these  banks added Rs 70,000 crore to the wealth of stock investors. And this was just at the beginning of the trading session. During the day, the stocks of these banks rallied further to add Rs 1 lakh crore to the market capitalization. At the end of day’s trading, Punjab National Bank stocks jumped 46.20 percent, Canara Bank 38.05 percent, Bank of India 33.96 percent, Bank of Baroda 31.47 percent ad SBI 27.58 percent. Financial analysts said that the recapitalization scheme will provide for the Basel III capital requirements and pave the way for business loans, which in turn will boost the economy and create innumerable employment opportunities.

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