Prefer State Bank of India, says Arvind Sanger

Arvind Sanger, Managing Partner of Geosphere Capital Management told CNBC-TV18, "There are some PSU banks that will participate in the rally. If the recovery does continue not withstanding the fact that the NPA cycle has not peaked and there could be some more shoes to drop there but not withstanding all of that the PSU banks would get dragged up in this rally and some of them are so cheap that if they don't have big NPAs ahead of them and that is where frankly we have not done the work to distinguish but a large name like State Bank of India (SBI) is probably the safe way to play the PSU rally. But obviously there are some PSU banks that would be lower down the size that could also be interesting."

At 10:27 hrs State Bank of India was quoting at Rs 1,645, up Rs 68.80, or 4.36 percent.

The share touched its 52-week high Rs 2,469.25 and 52-week low Rs 1,452.90 on 20 May, 2013 and 28 August, 2013, respectively.