Witnessing frenzied buying for a second straight session, banking stocks surged on Thursday on expectations of a stimulus package from the government to combat the economic fallout from the rapidly-spreading coronavirus (COVID-19) pandemic. The buoyancy in the global markets, surrounding the $2-trillion stimulus package in the US, further bolstered the sentiment in banking counters. Banking stocks had been decimated in the aftermath of the coronavirus breakout, amid fears that the pandemic would impact countless businesses and livelihoods, and result in a jump in non-performing assets.
The Nifty Banking index plunged by more than 45 per cent till March 24 from the all-time highs seen on February 20.
The Yes Bank crisis further aggravated the selloff in banking shares.
Any significant decline in the high-beta banking sector drags the overall markets.
At 11:20 am, the BSE banking index traded 7.7 per cent higher at 22,971.
While IndusInd Bank was up 45 per cent at Rs 437 at the time, Axis Bank, ICICI Bank, HDFC Bank and Kotak Bank trading with gains of between 4 per cent and 9 per cent each.
The BSE Sensex was up 3.6 per cent at the time.