State-run banks help shares open at all-time high

State-run banks help shares open at all-time high

Shares opening at an all time high were driven by gains in state-run banks as investors

The BSE Sensex resumed its record-setting run Wednesday, Nov. 4, 2019, rallying 222 points to its new lifetime high of 40,469.78, as investors accumulated banking and financial stocks amid hopes of more reform measures to boost growth. (PTI Photo)

Indian shares opened at record highs on Friday, driven by gains in state-run banks as investors cheered a central bank decision to conduct a special open market operation to bring down long-term yields.

The Reserve Bank of India on Thursday said it would buy 100 billion rupees ($1.4 billion) worth of the current benchmark 10-year bond while selling four bonds maturing in 2020 for an equivalent amount.

This is the first time the RBI has conducted a special open market operation of this kind, similar to the 'Operation Twist' carried out in the United States near the start of the decade.

The benchmark 10-year bond yield fell sharply to 6.61% by 0340 GMT from its previous close of 6.75%.

The NSE Nifty 50 Index rose 0.24% to 12,288.60 by 0355 GMT, while the S&P BSE Sensex index gained 0.25% to 41,781.50.

The Nifty PSU Bank index, which tracks the country's state-run lenders, added nearly 2%. Shares of State Bank of India, the country's largest lender, rose 1.8%.

The Nifty Bank index edged up 0.3% to an all-time high.

Meanwhile, shares in broader Asia hovered near 18-month highs as trade thinned in the run-up to Christmas.

Sentiment was also bolstered by Wall Street's record gains on Thursday as U.S. Treasury Secretary Steven Mnuchin said an initial U.S.-China trade deal would be signed in early January.

In India, The Nifty IT index rose over 0.5%, with Tata Consultancy Services Ltd gaining nearly 1%.

The biggest laggard on the NSE index was miner Vedanta Ltd with a more than 1% drop.