Sensex hits record, bank stocks surge

By Arnab Paul

(Reuters) - Indian shares hit all-time highs on Thursday with the benchmark BSE Sensex breaching 37,000 for the first time, led by banks, ahead of derivatives expiry later in the day.

Bank shares were boosted by more state-run lenders lining up to enrol for a scheme for faster bad-loan resolution. By Monday, more than 20 banks had signed up.

A government panel had suggested creating an asset management company (AMC) to resolve bad loans above 5 billion rupees ($73 million), among steps to clean up the banking sector.

The broader NSE Nifty was up 0.32 percent at 11,168 as of 0708 GMT, while the BSE index was 0.37 percent higher at 36,995.31, after hitting life-highs for the third straight session. The index took only 13 sessions to jump from 36,000 to 37,000.

"We expect markets (NSE) to remain above 11,100 post F&O expiry today, the overall sentiment is positive" said Saurabh Jain, AVP, Research at SMC Global Securities.

"Another comforting factor is that crude price have slid from highs in the beginning of the month, easing concerns of inflation."

The Nifty PSU Bank index surged 4.8 percent in its sixth straight session of gains. Canara Bank Ltd was the top gainer on the index, rising 5.19 percent after a surprise Q1 profit on Wednesday.

State Bank of India rose 5.3 percent to 286.20 rupees. A technical analysis suggested the stock may rise further and test a resistance at 294.14.

Domestic shares also tracked their Asian peers after U.S. President Donald Trump said he and European Commission President Jean-Claude Juncker had agreed to work to lower industrial tariffs on both sides. [MKTS/GLOB]

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 percent.

Ambuja Cement Ltd rose as much as 7 percent after reporting a 27 percent rise quarterly profit on Wednesday.

Bharti Airtel, which is expected to report its June-quarter results after market hours, rose as much as 2 percent.

Among the decliners, Larsen and Toubro Ltd shed early gains and was down 1.8 percent. It had reported a 36 percent increase in June-quarter net profit on Wednesday.

(Reporting by Arnab Paul in Bengaluru; Editing by Gopakumar Warrier)