Shares of public sector banks were seeing high buying investor on March 27, pushing the Nifty PSU Bank index nearly 2 percent higher, snapping a two-day losing streak, a day after the Banking Laws (Amendment) Bill was passed in the Parliament.
The Nifty PSU Bank index is currently the top gaining sector among NSE indices, supporting gains on Sensex and Nifty, which are higher after a muted start. Bank of Baroda was the top gainer on the index with Citi maintaining a Buy rating and opening a 'positive catalyst watch' on the stock.
Earlier, on March 26, Finance Minister Nirmala Sitharaman shared positive updates regarding PSU banks, during the discussion on the Banking Laws Amendment Bill in Rajya Sabha. FM Sitharaman informed that a comprehensive audit of the gold loan portfolios of public sector banks was undertaken, with no major lapses were reported. Sitharaman further added that PSU banks have created 3.94 lakh jobs since 2014 across different cadres with SBI alone creating nearly 94,000 jobs.
"Since March 2014, the banking network in India has grown significantly, with 42,511 branches of Scheduled Commercial Banks (SCBs) added till September 24, taking the total number to 1,65,501 as of September 2024. Of these, 85,116 branches belong to Public Sector Banks (PSBs)," she further said.
Sitharaman further said that the gross non-performing assets [NPAs] of the scheduled commercial banks hit a multi-year low of 2.5 percent, as in September 2024. Public sector banks meanwhile recorded the highest ever net profit of Rs 1.41 lakh crore in the previous financial year.
Shares of Bank of Baroda were the top gainer on the Nifty PSU Bank index, surging over 3 percent to the highest level in nearly a month. The shares of Union Bank followed, rising nearly 3 percent to trade at Rs 123 apiece. The stock has so far surged over 7 percent in the past one month. Punjab National Bank (PNB) and Canara Bank shares also recorded strong gains, rising nearly 2 percent each to trade at Rs 95 apiece and Rs 89 apiece respectively. Bank of India shares were meanwhile trading over 1 percent higher at Rs 107 apiece.
Other PSU bank stocks were trading in the green with marginal gains. These included Indian Bank, State Bank of India, UCO Bank, Bank of Maharashtra, Central Bank of India and Punjab & Sind Bank.
The shares of Indian Overseas Bank (IOB) however dodged the trend to hover in the red with marginal losses.
The PSU bank shares were seeing greater investor interest compared to their private peers, with Bank of Baroda, PNB and Canara Bank among the top gainers on the broader Nifty Bank index, followed by heavyweights HDFC Bank and ICICI Bank.
Axis Securities has shared a neutral outlook for Nifty Bank, while Angel One's latest note said, "Technically, there are no clear signs indicating that sellers have regained control of the index. As long as the crucial support in the 50,650-50,600 zone, highlighted by a bullish gap, remains intact, participants should consider utilizing dips as opportunities to enter long positions…On the flip side, while the 51,900-52,050 zone remains a strong resistance level, and a breakout above this zone is necessary for the uptrend to resume, immediate resistance can be found in the 51,450-51,500 band."
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