Sensex surges over 300 points; Bank Nifty up nearly 2%

Positive statements by Federal Reserve and strong buying among bank shares have boosted the markets

Benchmark indices continue to trade firm tracking firm global cues along with strong buying among banks and capital goods shares leading the gains.

By 10:17AM, the Sensex was higher by 306 points at 27,016 and the Nifty gained by 95 points at 8,124 levels.

The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices have gained by 2% each.

The market breadth in BSE remains healthy with 1,074 shares advancing and 135 shares declining.

The rupee is trading at 63.27/28 versus Wednesday's close of 63.6150/6250.

On the global front, Japan's Nikkei share average jumped 2.5 percent on Thursday morning after the U.S. Federal Reserve gave an upbeat assessment of the U.S. economy and promised to take a patient approach towards raising interest rates.

The Nikkei was at 17,242.15 in mid-morning trade, posting its biggest one-day gain since early November and pulling away from a 6-1/2-week low of 16,672.94 hit on Wednesday.

In its last meeting this year, the US Federal Reserve indicated a shift in its stance by removing from its statement its pledge to keep interest rates at zero for “a considerable time”.

A change in the language, which now says that the Fed will be “patient” on the timing of interest rate increases, does suggest that the recovery is on a surer footing.

Back home, BSE Consumer Durables index has surged by over 3% followed by counters like Banks, Capital Goods, Power, Realty and Metal, all gaining by 2% each.

India's cabinet approved a constitutional amendment bill on Wednesday to rationalise state and central indirect taxes into a harmonised goods and services tax (GST), a government official told reporters.

Notable gainers from the Sensex pack are BHEL, Hindalco, ICICI Bank, Tata Power, SBI, Tata Steel and ONGC.

Banking shares mainly public sector undertakings (PSU) are trading higher between 2-3%, extending their yesterday’s late noon surge on the National Stock Exchange (NSE). Bank Nifty has gained by nearly 2% trading at 18,179 mark.

State Bank of India (SBI), Andhra Bank, Punjab National Bank, IDBI Bank, Allahabad Bank, Canara Bank, Union Bank of India and Syndicate Bank are up nearly 3% each, while Oriental Bank of Commerce, Indian Overseas Bank, Bank of Baroda and Bank of India are up 2% each on NSE.

According to Moody's Investors Service, the ability to raise private capital that dilutes the government’s stake is credit positive for undercapitalized public-sector banks because government resources to recapitalize the banks are limited.

L&T has gained nearly 2% after the company announced that L&T and Canada Pension Pan Investment Board (CPPIB) have completed the definitive investment agreement entered into in June 2014.

From the Consumer Durables pack, Titan is trading higher by over 3%.

HUL is trading marginally lower as Goldman Sachs has downgraded its shares to sell.

Among other shares, Punjab National Bank and JK Tyre and Industries are trading higher by up to 8% after both the stock turned ex-stock split today.