Indian markets traded with strong gains, with the Nifty recording a fresh all-time high but closing marginally short of the 8,500 mark it has never scaled. At close, the Sensex rose 0.95 percent, or 267 points, points to 28,334 while the Nifty jumped 0.9 percent, or 75 points, to 8,477. Banks led the charge all day with Kotak Mahindra Bank rising 3.67 percent to hit a record high after it announced a USD 2.5 billion worth all-share merger deal with ING Vysya that would make it India’s fourth largest private bank behind ICICI, HDFC and Axis. ICICI (up 2.53 percent) too hit fresh lifetime highs. Brokerages were largely positive on the Kotak-ING deal with many saying that while it may immediately pressure some of Kotak’s metrics such as return on equity, it would help it in the long term by boosting its presence in the South where ING is focused, as well as by incorporating its SME lending book. How ferocious was the bank rally today can be judged by the fact that the top four gainers in the Nifty and the top eight gainers in the futures space were all banks. The much-watched Bank Nifty sector index jumped 2.33 percent to end at a record closing of 18,056 for the first time. Among other sector gainers were autos, capital goods and banks, rising between 0.3 percent and 0.8 percent while pharma had a dull day despite Cipla rising 1.9 percent on a positive brokerage call. IT shares too traded lower with Infosys leading the losses with a 1.9 percent decline. The IT outsourcer was recently hit by an overbilling scandal in which a top executive from its BPO unit was found involved. Power shares climbed marginally – Power Grid was up 0.3 percent while NTPC gained 0.1 percent – after the government announced a Rs 33,000 crore infusion into a scheme aimed at splitting electricity feeders for agriculture and to strengthen transmission and distribution in the country. In news-driven stocks, Yes Bank was up 4.1 percent after the central bank allowed fresh FII buying in the counter, JM Financial was up 1 percent after announcing an infusion in its realty subsidiary and appointing former Citi chief Vikram Pandit to its board and Financial Technologies, which gained 2.5 percent after Jignesh Shah, accused of being involved in the NSEL scam, stepped down from its board. Consumer non-durable shares were also muted, with leader HUL falling 0.8 percent. Tech Mahindra, the other player that announced an M&A deal with its USD 240 million buyout of US-based telecom service provider LCC, fell 1.1 percent.