Nifty Bank Jumps Nearly 1% as ICICI Bank, Axis Bank and HDFC Bank Lead Gains

Nifty Bank jumped nearly 1% in early trade on Thursday, September 3, as ICICI Bank, Axis Bank, HDFC Bank and State Bank of India gained following record foreign-currency inflows attracted through Reserve Bank of India measures.

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The banking index rose 0.91% to 57,694.95 at around 9:40 am, according to Moneycontrol. Banking stocks outperformed the wider market, with the Nifty Private Bank and Nifty PSU Bank indices also among the leading sectoral gainers.

ICICI Bank climbed around 1.6%, while Axis Bank gained about 1.5% during the reported period. HDFC Bank and SBI were also among the leading gainers on the Nifty 50, according to Moneycontrol.

RBI Measures Draw $136 Billion

India attracted $136.38 billion through special foreign-currency schemes introduced by the RBI in June, according to the central bank’s figures reported by Reuters. The inflows were substantially higher than market expectations.

Foreign Currency Non-Resident (Bank), or FCNR(B), deposits accounted for $127.23 billion of the total. External commercial borrowings brought in another $3.89 billion, while overseas foreign-currency borrowings contributed $5.26 billion, the RBI data showed.

The FCNR(B) deposit programme was closed on August 31 after receiving strong inflows. It was originally scheduled to remain open until the end of September. A separate facility allowing banks to raise money overseas remains available, Reuters reported.

Banks swap the foreign currency raised under these measures with the RBI. This adds to the central bank’s foreign-exchange reserves, which reached a record $729.33 billion in the week ended August 21, according to RBI data cited by Reuters.

Mid-sized Banks Rally

The rise was not limited to large lenders.

Bank of Maharashtra jumped nearly 4% to ₹85.25, while Punjab & Sind Bank gained 3% to ₹23.31, according to Moneycontrol. Bandhan Bank advanced 2.32% to ₹165.45 and Bank of India rose 2.04% to ₹145.40. Four banks featured among the leading gainers on the BSE Midcap index.

Wider Market Recovers

The Sensex and Nifty also recovered after three consecutive sessions of losses.

The Sensex climbed 334.16 points, or 0.44%, to 76,904.51 in morning trade. The Nifty rose 95.45 points to 24,009.90, according to a PTI report published by Outlook Business. Tata Steel and Adani Ports joined Axis Bank, ICICI Bank, SBI and HDFC Bank among the major Sensex gainers.

Foreign institutional investors purchased Indian equities worth ₹6,688.37 crore on Wednesday, while domestic institutional investors bought shares worth ₹2,812.98 crore, as per exchange data cited in the PTI report.