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Last Updated : Aug 23, 2019 12:17 PM IST | Source: Moneycontrol.com

HDFC Bank management rejig drags Bank Nifty; PSU banks gather steam

Nifty PSU Bank added over a percent led by gains from Bank of Baroda and PNB, which jumped over 2 percent each. Bank of India, Canara Bank, IDBI Bank and Oriental Bank of Commerce were up 1 percent each.

Sandip Das @Im_Sandip1

Benchmark indices have managed to recover some lost ground and are trading flat with the Sensex down 32 points at 36,440 mark, while the Nifty is trading marginally in the green, up 18 points at the 10,760 levels.

Banking names are mixed, with Bank Nifty trading in the red. Stocks to drag the index include ICICI Bank, HDFC Bank, IndusInd Bank and Kotak Mahindra Bank.

Shares of HDFC Bank fell after the private sector lender announced management restructuring. In the last three months, the stock has shed more than 10 percent.

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The country's largest private sector lender by market capitalisation informed exchanges that its board of directors had on August 22 appointed Srinivasan Vaidyanathan as the Chief Financial Officer (CFO), with immediate effect.

However, YES Bank jumped over 6 percent intraday on Friday after a media report indicated that the lender is expected to consider raising funds again soon.

The stock rebounded after losing 29 percent in the four previous sessions due to a fall in the valuation of its exposure (12.79 percent stake) to CG Power, which has reported corporate governance issues.

The private sector lender's board of directors is likely to meet soon to discuss further fundraising, reported CNBC-TV18, quoting unnamed sources.

The business news channel learnt that the bank may be eyeing an additional $1.2 billion equity infusion, and is expected to seek shareholder approval after getting the nod from the board.

CLSA has a buy rating on IndusInd Bank with a target of Rs 2,160 per share. The global research firm sees the bank as operationally steady and sees normalisation of credit costs and synergies from Bharata Fin to lift RoE towards 20 percent.

Nifty PSU Bank added over a percent led by gains from Bank of Baroda and Punjab National Bank, which jumped over 2 percent each, followed by Bank of India, Canara Bank, IDBI Bank and Oriental Bank of Commerce which are up 1 percent each.

State Bank of India is up half a percent. The bank maintained status quo on savings rates of 3.50 percent up to Rs 1 lakh.

Naveen Kulkarni of Reliance Securities continues to remain cautious on PSBs, as capital constraints and weak spreads should limit any meaningful expansion in RoAs. The firm likes ICICI Bank and HDFC Bank in the large-cap space and Federal Bank in the mid-cap space.

Technical analyst Rajat Bose of rajatkbose.com has a buy rating on HDFC Bank with stop loss below Rs 2,147 for targets of Rs 2,205 and Rs 2,219.

Prakash Gaba of prakashgaba.com has a sell on ICICI Bank with target at Rs 390 and stop loss at Rs 406.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​

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First Published on Aug 23, 2019 12:17 pm
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