Indian shares climbed on Wednesday, led by banking stocks after the government approved a $32.43 billion plan to recapitalise beleaguered lenders.
The government will sell 1.35 trillion rupees of recapitalization bonds, while banks will raise another 760 billion rupees through "budgetary support" and from the markets, according to the plan announced Tuesday.
The record capital injection and plans to spend on building roads is Prime Minister Narendra Modi's attempt to revive an economy that's expanding at its slowest pace in three years.
The S&P BSE Sensex gained 1.3 percent at 33,042 while the broader NSE Nifty rose 0.86 percent to 10,295.
The S&P BSE PSU Index climbed 8 percent. State-run lenders including Punjab National Bank, Canara Bank, Union Bank, Bank of Baroda and Bank of India surged between 29 percent to 50 percent in Mumbai trading.
Private Bank stocks fell. Yes Bank lost 5 percent, HDFC Bank shed 4 percent, IndusInd Bank dropped 4 percent, Kotak Mahindra Bank lost 5 percent while Federal Bank was down 3 percent.
Market breadth was in the favour of gainers, with about 2 stocks advancing to every 1 stock that declined.
Southeast Asian stock markets were largely firm on Wednesday as investors took heart from the Dow scaling a record closing high and as oil prices spiked overnight.
MSCI's broadest index of Asia-Pacific shares outside Japan shrugged off early sluggishness and rose 0.2 percent.
