Banking stocks surged in trade after the US Federal Reserve kept interest rates steady in its policy meet.

Axis Bank was up a huge 5 per cent, while ICICI Bank and HDFC Bank gained 4 per cent in trade. Investors continued to buy into banking stocks after reports that private banks may become fully foreign owned if the proposal to accept overseas investment in the sector to 100 per cent is accepted.

Public Sector Banking stocks like Canara Bank, Bank of Baroda and Punjab National Bank also gained close to 4 per cent.

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