PSU bank stocks fell prey to profit booking on July 1, pushing the Nifty PSU index down in the red to snap a five-day gaining streak.
Bank stocks have been in focus recently, with private and PSU bank stocks seeing significant surge to push the broader Nifty Bank index to fresh lifetime highs. While private players saw a downturn in stock prices yesterday, PSU bank stocks continued to rally.
However, investors may have now resorted to profit booking, leading to a fall in the share prices.
Bank of Baroda shares tumbled nearly 2 percent to emerge as the top loser on the Nifty PSU Bank index. Union Bank of India and Punjab & Sind Bank (PSB) followed, dropping nearly 1.5 percent each. UCO Bank, Canara Bank and Bank of Maharashtra fell up to 1 percent each, while Bank of India, Indian Bank, State Bank of India (SBI) and Central Bank of India trading in the red with marginal losses.
Indian Overseas Bank (IOB) shares however bucked the trend to trade in the green with marginal gains.
The Nifty PSU Bank Index had jumped 2.6 percent on Monday after the finance ministry urged these lenders to offer more credit and monetise subsidiaries through IPOs and stake sales.
According to reports, approximately 15 subsidiaries or joint ventures under public sector banks are currently being considered for initial public offerings (IPOs) or strategic divestments in the medium to long term.
The most anticipated IPOs among these include those of SBI General Insurance and SBI Payment Services, the report added. In FY25, the collective net profit of 12 public sector banks reached a record Rs 1.78 lakh crore, up 26 percent from the previous year. In absolute terms, the profit increase amounted to nearly Rs 37,100 crore year-on-year.
Private bank stocks also dropped on July 1, with heavyweight Axis Bank leading the losses. The shares of the private lender tumbled nearly 3 percent.
The sharp fall in the share prices pushed the Nifty Bank index down in the red to hover around 57,164.
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