Market Update: Nifty PSU bank drags as Union Bank, PNB shed 1-2%, IT outperforms; HCL Tech up 2%

The Indian benchmark indices were trading on a positive note on Friday morning with the Sensex gaining over 51 points while the Nifty was up 15 points at 10,559.

Nifty IT was the outperforming sector which jumped 1.3 percent led by stocks like HCL Tech, TCS, Mindtree, Infosys, Tech Mahindra and Wipro.

Despite the PNB fraud effect on the Bank Nifty, the index managed to stay in the green led by stocks like ICICI Bank which was up 1 percent followed by Federal Bank and Yes Bank.

The Nifty PSU banking index was down 0.6 percent with PNB falling over 2 percent after the bank detected some fraudulent transactions Worth USD 1,771.7 million on February 14, 2018.

Union Bank of India which has some exposure to the fraud was down 1.6 percent while SBI shed 0,5 percent.

From the Nifty, the stocks that gained the most were HCL Tech which jumped 2.6 percent followed by Ambuja Cements and TCS which gained over 2 percent each. Infosys and Dr Reddy's Labs were the other gainers.

The top Nifty losers included BPCL, Adani Ports, Power Grid, Hindustan Unilever and Axis Bank.

The most active stocks included PNB which shed 2.2 percent followed by Fortis which was down 0.5 percent. Infosys, State Bank of India and Jet Airways were the other active stocks.

From the BSE, Vakrangee jumped close to 5 percent followed by KEC International, Max India, HCL Tech and Swan Energy.

The stocks that hit new 52-week high on NSE included KEC International and Polaris Consulting among others while Dena Bank, Punjab National Bank and Syndicate Bank were some of the stocks that hit fresh 52-week low.

The market breadth was in favour of the declines with 783 stocks advancing in while 792 stocks declined and 436 remained unchanged. On the other hand, 1003 stocks advanced on BSE with 1082 stocks declining and 98 remained unchanged.

Macquarie has maintained an Underperform rating on Punjab National Bank with target of Rs 128. The house is of the view that if the bank is held liable, this would translate to 27 percent of net worth and 43 percent of market cap and would wipe out profits made from FY12 to FY17.

JPMorgan has maintained a neutral rating on Punjab National Bank with target of Rs 195 and expects this event to remain an overhang on stock price in the near term. It is of the view that if liability of Rs 11,300 crore booked, then there will be 15 percent hit to FY19 estimated book value per share.

PNB could divest its 33 percent stake in PNB Housing Finance, it added.