India’s Nifty 50 stock index is coming off another good week, and a short time ago Indian stocks were climbing to new record highs in Monday trade.
The index closed Friday’s session up 1.7% for the week, and the gains were driven by some huge increases in the market value of state-run banks.
The recent price moves have seen it consolidate above the key 10,000 benchmark:
The Nifty 50 is now up more than 25% in 2017, helped by foreign capital which flowed into emerging markets in the first half of the year amid the backdrop of a weaker US dollar and steady global growth.
While it was another week for the broader market, those gains were nothing compared to the price action in India’s banking sector.
The moves followed an announcement by the Indian government that it would fund a recapitalisation of state-run banks, to the tune of 2.11 trillion rupees ($US32.4 billion).
According to Reuters, the recapitalisation plan exceeded analyst’s expectations. The result was a huge gain for the State Bank of India (SBI) and Punjab National Bank (PNB).
The SBI closed the week up 24%, exceeded by gains for the PNB which had rocketed around 48% higher by Friday’s close:
The Reuters report said the capital injection is the highest of its kind for more than 10 years. It’s hoped the funds will support a sector recovery and help boost private sector investment.
Shares in both the SBI and PNB are continuing to climb in Monday trade, a short time ago up by 1.37% and 4.09% respectively.