Banking shares extend gain; Bank Nifty surges 3% in two days

Axis Bank, Central Bank of India, Oriental Bank of Commerce and Indian Bank were up 4% each on NSE.

Banking shares are trading higher by up to 4%, extending their Thursday’s rally on the bourses, after WPI inflation hit a five-month low in July, helped by a moderation in fuel costs.

The WPI rose 5.19% year-on-year last month, its slowest pace since February. In June, prices rose 5.43% from a year earlier.

Meanwhile, the Prime Minister Narendra Modi in his maiden Independence Day speech announced a new financial scheme to help the poor open bank accounts.

Under the 'Pradhan Mantri Jan Dhan Yojana' scheme, the person who will open bank account will get a debit card and the family will get Rs 1 lakh insurance cover to tide over any unforeseen eventuality.

Axis Bank, Central Bank of India, Oriental Bank of Commerce and Indian Bank are up 4% each, while State Bank of India (SBI), ICICI Bank, Federal Bank, YES Bank, South Indian Bank, Canara Bank and Bank of India up 2-3% on National Stock Exchange (NSE).

The NSE banking share index Bank Nifty, up 2% or 305 points at 15,395 as against 0.9% rise in CNX Nifty at 1355 hours. Bank Nifty rose nearly 3.2% compared to 1.5% gain in benchmark index in past two trading sessions.