Banking shares rally; Bank Nifty zooms near 600 points

SBI, BOB, BOI, Canara Bank, PNB, IndusInd Bank, Yes Bank, Axis Bank and ICICI Bank are up 2-6% on the NSE.

Banking shares are in demand on the bourses and trading higher by up to 6% on the National Stock Exchange (NSE).

State Bank of India (SBI), Bank of Baroda, Bank of India, Canara Bank, Punjab National Bank, IndusInd Bank, Yes Bank, Axis Bank, ICICI Bank and Kotak Mahindra Bank are up 2-6% on NSE.

Bank Nifty, the NSE banking share index, has surged 3.2% or 579 points at 18,602 at 1219 hours against 1.4% rise in the benchmark CNX Nifty. The banking index touched a record high of 18,608 in intra-day deal.

According to Business Standard reports, Finance Minister Arun Jaitley is likely to coax Reserve Bank of India (RBI) Governor Raghuram Rajan to cut interest rates when the two meet on December 1 in New Delhi ahead of the central bank’s monetary policy meeting a day later.

Meanwhile, Brent crude oil prices have seen a sharp downtrend in recent days, the movement of crude oil prices has huge impact on India's fiscal, current account situation and fuel price inflation.

Slower inflation could support regulators (RBI) to increase liquidity in the market in short term and positive action by the regulators will be good for interest sensitive sectors/stocks, according to analyst at Equentis Capital Private Limited.

Among the individual stocks - Bank of Baroda (up 5% at Rs 1,069), SBI (4% at Rs 318), IndusInd Bank (4% at Rs 750), Yes Bank (3% at Rs 715), Federal Bank (2% at Rs 151) and HDFC Bank (1% at Rs 960) have hit their respective 52-week highs during intra-day trade.