Banks drive Sensex to record high; ICICI Bank leads

Strong buying in banking stocks took the BSE Sensex and the broader Nifty to a record high on Monday. The Bank Nifty jumped over 2.5 per cent propelling the Sensex over the psychological 22,000 levels. The Nifty edged above its resistance of 6,575 in trade today.

Private sector lenders were the big gainers on Monday. ICICI Bank, India’s biggest private lender, made a new 52-week high and traded with around 4 per cent gains at Rs. 1,246 as of 11.25 a.m. Dealers told NDTV that ICICI Bank can become the ‘Go-to’ name in the private banking space. On Friday, 72 per cent of 3 million shares traded were for delivery, indicating the bullishness in the stock.

Meanwhile, traders expect Axis Bank to become FII restricted after the government’s 9 per cent stake sale in the private lender on Friday.

Citigroup bought 38.23 lakh shares, while Goldman (Singapore) picked up 23.5 lakh shares in Axis Bank on Friday. New World Fund Inc. bought 26.8 lakh shares. State-run LIC bought the most – 85 lakh shares in Axis Bank on Friday.

There has been follow-up buying in Axis Bank on Monday, but interest has increased in ICICI Bank, traders said.

Vaibhab Agarwal of Angel Broking told NDTV that Axis Bank has touched the maximum FII limit (49 per cent), so until the lender looks at instruments such as ADR or GDR, it will be difficult for them to have further foreign investment.

ICICI Bank is a good buy even fundamentally, Mr Agarwal added.