The Indian stock market opened lower with Sensex down 875.32 points, or 1.71 percent, at 50,163.99, and the Nifty fell 249.50 points, or 1.65 percent, to 14,847.90.
Among the sectors, the PSU Bank index was down over 2 percent dragged by Bank of Baroda, State Bank of India, Indian Bank, Canara Bank, Central Bank of India and Union Bank of India, which are down 2-3 percent each.
Global research firm CLSA has retained its bull call on SBI and has raised target to Rs 600 from Rs 540 per share. It is of the view that the weak corporate credit cycle is at its end adding that credit costs are normalising, according to a CNBC-TV18 report.
"Stable margin will take the bank’s RoA to 80-100 bps. We increase net profit estimates by 4-5 percent," CLSA added.
State Bank of India was trading at Rs 399.75, down Rs 7.50, or 1.84 percent at 09:29 hours. It has touched an intraday high of Rs 400.40 and an intraday low of Rs 394.30.
On the other hand, share price of Bank of Baroda was trading at Rs 86.70, down Rs 3.20, or 3.56 percent. It has touched an intraday high of Rs 87.25 and an intraday low of Rs 85.20.
The bank has launched QIP worth Rs 4,500 crore at an issue price of Rs 81.70 per share with an option to upsize up to an additional Rs 2,000 crore.
The sector was down mainly on account of profit booking. Banking shares are in focus on the back of Finance Minister Nirmala Sitharaman's statement that the private banks can now participate in government business.
"The government has lifted the embargo on private sector banks for the conduct of government-related banking transactions such as taxes and other revenue payment facilities, pension payments, small savings schemes etc," said the government in its statement available on the tweeter handle of NSitharamanOffice.
In terms of volumes, the most active stocks included PNB followed by Indian Overseas Bank, Central Bank of India, Bank of Maharashtra, SBI and Union Bank of India.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.