New Delhi, Sept. 24 -- The public sector bank stocks defied the sombre market mood and rallied in trade on Wednesday, September 24, after media reports suggested that the government is considering a proposal to increase foreign investment limits in government-owned banks.

According to a report in The Economic Times, the government, as part of its next policy reform, is planning to increase the foreign investment limit in PSU Bank stocks from the current 20% to as high as 49%, with the government retaining a majority stake of over 51%.

This move is expected to bring significant capital into the banking sector, thus driving an upmove in several PSU banking counters.

Against this backdrop, the Nifty PSU Bank jumped nearly 1% in trade and ...