Nifty Bank index buoyant as long-standing demands are met in Budget

Increase of 12.1 per cent clocked in two days is the highest gains posted by the index in almost a year

The Nifty Bank index has gained 12.1 per cent since Monday, thanks to the Union Budget promising to fulfil some of its financial sector's long-standing demands – that of setting up a development finance institution (DFI) and a bad bank to absorb the toxic assets in the banking system.

While the advantages of both the initiatives are likely to accrue only in the long run, foreign brokerages such as Morgan Stanley, JP Morgan and Credit Suisse were quick to reaffirm their overweight position on the Indian financial services sector.

“We believe the private sector banks could be in line for