The shares of several PSU banks dropped in trade on August 28, pushing the sectoral index down into the red for the sixth consecutive session.
The Nifty PSU Bank index was down nearly 0.7 percent to hover around 6,803 in the afternoon. The index has now dropped nearly 5 percent in six consecutive sessions of recording losses.
Punjab & Sind Bank (PSB) was the top loser on the index, dropping nearly 2 percent to trade at around Rs 28 apiece. Union Bank of India, Bank of Maharashtra, UCO Bank and Bank of India shares fell more than 1 percent each.
Punjab National Bank (PNB), Canara Bank and Central Bank of India shares fell around 1 percent each, while Bank of Baroda, Indian Bank, State Bank of India (SBI) and Indian Overseas Bank (IOB) shares were trading in the red with marginal losses.
Private bank stocks also dropped, with AU Small Finance Bank shares being down nearly 2 percent. Heavyweights HDFC Bank and ICICI Bank were down over 1 percent each. Kotak Mahindra Bank, Canara Bank, Bank of Baroda and IDFC First Bank shares were down nearly 1 percent each.
The sharp drop in bank stocks pushed the Nifty Bank index down nearly 0.9 percent to stand at 53,969 in the afternoon.
"Bank Nifty continues to remain sluggish. Bank Nifty, with a bearish candle formation, has broken below the important and crucial support zone at the 55,000 level to weaken the bias and sentiment, expecting a further slide with the next major support visible near the 53500 zone. For the bias to improve, the index needs to witness a revival and move past the significant 50EMA level at the 55700 zone to establish some conviction and thereafter expect a further rise in the coming days. Bankex with profit booking witnessed a slip down below the 61000 zone to weaken the bias, and further ahead, a decisive breach below the important support of the 200 DMA level of 59900 shall trigger fresh selling pressure with the next major and crucial support positioned near the 58300 zone. For the bias to improve, the index needs to move past the resistance hurdle of the 50EMA level of 62300 to anticipate further rise in the coming days. BankNifty would have the daily range of 53800-55000 levels," said Vaishali Parekh, Vice President - Technical Research at PL Capital, while explaining the technical side of the index.
Notably, the Indian government has appointed global investment banking firm Goldman Sachs as the transaction advisor for the stake sale in four public sector banks - UCO Bank, Central Bank of India, Punjab & Sind Bank, and Indian Overseas Bank (IOB). The government will likely dilute its equity stake in each of the four banks by up to 5% over the next two to three years, CNBC-TV18 reported.
Also read: Our LIVE blog on stock market updates
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