Heavy profit booking in PSU Banks: Index declines by 3% - PNB, BoB, IOB and SBI lead the fall – Check brokerages' view
A day after surging for over 5 per cent during Thursday’s trade, Nifty PSU Bank declined most among sectors by around 3 per cent on the NSE at the market close on Friday.
A day after surging for over 5 per cent during Thursday’s trade, Nifty PSU Bank declined most among sectors by around 3 per cent on the NSE at the market close on Friday. The stocks in index tumbled between 2-5 per cent, on the back of heavy profit booking.
The government on Thursday approved a guarantee of Rs 30,600 crore to be provided for the security receipts issued by the National Asset Reconstruction Company (NARCL) to buy bad loans of lenders.
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The majority of the PSU banks rallied between 5 per cent and 10 per cent in anticipation of the announcement during yesterday’s session.
Among the individual stocks, Punjab National Bank declined most by almost 5 per cent to touch day’s low of Rs 39.8 per share, the bank on Friday also announced that it has revised the Repo Linked Lending Rate (RLLR) from 6.80 percent to 6.55 percent with effective from September 17, 2021.
Second in the declining lead, Bank of Baroda and Indian Overseas Bank declined by around 4 per cent, followed by Punjab and Sindh Bank down over 3.5 per cent. Whereas, Bank of Maharashtra, Bank of India, and UCO Bank each slumped by over 3 per cent at the market close today.
Other state-owned banks such as Canara Bank, Indian Bank, J&K Bank and Union Bank each slipped over 2 per cent, similarly, India’s largest lender State Bank of India too joined the declining party, dragging both the PSU and Bank Nifty index, it declined by over 2 per cent, after hitting a life high.
Credit Suisse commented on the NARCL declaration by government. The brokerage firm continues to like SBI among PSU banks and prefer large private banks ICICI bank, Axis Bank and HDFC Bank. It states, floor rate of recovery at an average of over 18 per cent is medium-term positive.
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