Banking stocks rally on better earnings outlook; room seen for upside

Hopes of improvement in asset quality, better credit growth and lower valuations are supporting factors

On Friday, the BSE Bankex ended with gains of about 4 per cent, the most since March 13. This was also the highest close for the index since that day.

The benchmark Sensex rose 0.9 per cent, or 353 points, to end at 39467.31, its highest close since February 27, The Nifty50 index added 0.83 per cent to end at 11,655. Both indices logged their sixth consecutive day of gain.

Four of the five top Sensex gainers were banking stocks, led by IndusInd Bank, which rose 8.4 per cent, followed by Axis Bank and ICICI Bank, which rose 7.7 per cent and