Shares of public sector banks declined in Tuesday's trade, snapping a two-session rally, as investors resorted to profit booking ahead of the Reserve Bank of India’s monetary policy decision later this week.
The Nifty PSU Bank index fell over half a percent, with 11 of its 12 constituents trading in the red. Indian Overseas Bank led the losses, slipping 3.95 percent to hit an intraday low of Rs 40.40 on the NSE.
Bank of Maharashtra and Indian Bank also witnessed selling pressure, shedding up to 2 percent, while UCO Bank and Central Bank of India dropped 1.14 percent and 0.89 percent, respectively.
The pullback comes after strong gains in the previous two sessions, driven by expectations that the RBI may announce a rate cut at its Monetary Policy Committee (MPC) meeting on Friday. Optimism over robust GDP growth data had further supported sentiment in the banking space, with hopes of sustained credit demand.
PSU bank shares rise up to 6% on rate cut hopes, Q4 GDP; BoM, Union Bank, IOB lead gains
Punjab National Bank was the only stock in the PSU Bank index to buck the trend, managing to stay in the green in today's trading session.
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