Don't chase today's PSU bank bounceback: Analysts

Shares of public sector banks, such as Punjab National Bank and Bank of Baroda were up over 9 percent today, with analysts attributing the jump to short covering, value hunting or reports that the government was in the process of finalizing its Rs 12,000-crore recapitalization package that it had recently pledged for the capital-starved banks. But they were clear in their conviction: this bounceback is unlikely to last into the near or immediate term and that short term traders and value investors should come back later to buy."PSU banks have been the most hated space. Every single bear on the space is in hiding," Mehraboon Irani of Nirmal Bang Securities told CNBC-TV18's Sonia Shenoy and Anuj Singhal in an interview.The numbers bear this out. Compared to the Sensex, which is flat for the year, the PSU Bank index is down about 23 percent this year.Advising traders to look past today's move, Irani said the sector now faces an event-based risk and till that was out of the way, it may continue to languish."That risk is will the capitalization happen and will market like it? We must not forget that PSU banks need about Rs 2.5 lakh crore over the next 2-3 years [in order to meet their funding needs]," he said.He maintained that he was confident that it will happen at some point and that India cannot achieve high GDP growth rates with its PSU bank sector lagging and the government will be forced to infuse capital.But in the interim, there could be uncertainty. "These are not for those who look at the ticker regularly. There could be further downside. [But if you're a long-term investor, you could buy]."Devang Mehta of AnandRathi had the same view."This is not for someone with a short- to medium-term horizon. PSU banks will continue to have asset quality problems for at least 2-3 quarters more. I would rather buy private banks till then," he said.Technical analyst Sudarshan Sukhani too said it was too early to say if today's bounceback would last. "For the long term, PSU banks are mouth-watering opportunities. But I won't buy them for a trade," he said.