Indian shares rose to record highs on Monday as state-owned lenders extended a rally from the last week sparked by the government’s announcement of a $32.4 billion recapitalisation plan, while energy firms gained on higher crude prices.
Top lender State Bank of India rose 3.6 percent while Punjab National Bank gained over 8 percent on hopes that the government’s capital infusion will help them clean up their balance sheets.
Sentiment was also upbeat in domestic and global energy stocks with Brent crude hitting its highest level since July 2015 after Saudi Arabia agreed to support the extension of a global oil production cut agreement.
Reliance Industries surged as much as 1.7 percent and was the top gainer in the index.
“It’s a hope rally (for state-run banks),” said Sumit Pokharna, deputy vice president, Kotak Securities.
“Money is shifting from private banks to PSU banks,” he added, referring to public sector union banks, as state-run lenders are often called in India.
The Nifty was up 0.48 percent at 10,372.70 as of 0533 GMT.
The benchmark Sensex was 0.38 percent higher at 33,282.52.
State-run lenders drove the indexes higher, with the Nifty PSU bank index rising as much as 4.3 percent. Its 30 percent gain last week was much larger than a 0.8 percent rise in the Nifty private bank index over the same period.
Nifty Energy index, which rose 40 percent last week, was trading 1.2 percent higher. Bharat Petroleum Corporation Ltd climbed 2.9 percent.
Shares of Oil and Natural Gas Corp Ltd rose as much as four percent to their highest since May 4 after the company posted a higher-than-expected rise in second-quarter profit on Saturday.