PSU banks stocks rally on recapitalization plans; SBI, PNB zoom

India Infoline News Service | Mumbai | October 25, 2017 17:55 IST

PSU Bank index was the flavor of the day, surging ~30% lead by PNB, Canara Bank and SBI, with all hitting fresh 52-week highs. PNB was the clear outperformer, gaining a mammoth ~46% gains at the close.

Businessman showing growing charts
PSU Banks rallied massively on Wednesday after the govt announced Rs 2.11 trillion for PSU bank recapitalization to revive investments as well as growth. Out of the total commitment, Rs 1.35 trillion will come from the sale of so-called recapitalization bonds. The remaining Rs 76,000 crore will be through budgetary allocation and fundraising from the markets.

PSU Bank index was the flavor of the day, surging ~30% lead by PNB, Canara Bank and SBI all hitting fresh 52-week highs. PNB was the clear outperformer, gaining a mammoth ~46% gains at the close.

Nifty Bank index rallied 755 points, gaining ~3.12%. The entire gain in the index future was mainly on account of the short covering.

SBI surged nearly 26%, its biggest single-day jump since January 1994. State Bank of India ended at Rs 324.7, up by Rs 70.2 or 27.58% from its previous closing of Rs 254.5 on the BSE. The scrip opened at Rs 279.95 and touched a high and low of Rs 328 and Rs 279.95 respectively.

Market participants sold shares of most private sector banks and non-banking financial companies to buy shares of state-owned banks. The government's recapitalisation plan will not only help these government-owned banks clean up their balance sheets and meet capital requirements but will also enable them to meet credit demand.

Punjab National Bank ended at Rs 201.9, up by Rs 63.8 or 46.2% from its previous closing of Rs 138.1 on the BSE. The scrip opened at Rs 151.9 and touched a high and low of Rs 207 and Rs 151.9 respectively.

Canara Bank ended at Rs 437.9, up by Rs 120.7 or 38.05% from its previous closing of Rs 317.2 on the BSE. The scrip opened at Rs 348.9 and touched a high and low of Rs 442 and Rs 348.9 respectively.

The Nifty 50 is seen in a range of 10230-10400. Today, it ended at a record closing high of 10295.35, up 87.65 points or 0.9%, while the Sensex ended at an all-time closing high of 33042.50, up 435.16 points or 1.3%.

Earlier today, the Nifty 50 hit a lifetime of 10340.55, and the Sensex hit an all-time high of 33117.33.


***Note: This is a NSE Chart

 

Advertisements

  • Save upto Rs.2.67 lakh with Pradhan Mantri Awas Yojana ...Know more
  • Now Save Rs.3150 on your Demat Account ...Click here
  • Now get IIFL Personal Loan in just 8* hours...APPLY NOW!
  • Get the most detailed result analysis on the web - Real Fast!
  • Actionable & Award-Winning Research on 500 Listed Indian Companies.