The S&P CNX Nifty was trading higher by 16 points, while the Sensex rallied by more than 63 points at 9.30 am IST. PSU banks saw frenzied buying with State Bank of India higher by more than 1.74%, PNB jumped 2%, while Canara Bank was trading higher by more than 2% and Union Bank show a surge by more than 3%. The power sector restructuring is likely to benefit PSU banks which have lent to the sector, which is why there was buying interest in these banks.

Other stocks that gained from the Nifty stocks included Axis Bank, Wipro HCL and Hindalco. Stocks associated with the power sector jumped following the government's initiatives for the power sector. Tata Power was up 2.47% in early trade, while power supplier BHEL gained 2%.

Shares of Software stocks like TCS and Infosys continued to trade flat, following a weak rupee, while Reliance Industries remained subdued at Rs 839.

Among the prominent losers in trade were Cairn India, Jindal Steel, Hindustan Unilver and HCL Tech.

Meanwhile, markets in Asia were trading mixed with the Japanese Nikkei and Strait Times trading higher, while the Chinese Shanghai Composite and Taiwan's Taiwan Weighted trading lower.

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