Nifty Bank -; Financial Services indexes under pressure amid Q3 earnings and ahead of RBI meet; PSU Bank stocks surge

7 Feb 2022 , 01:05 PM

Nifty Banking and Financial Services were under selling pressure and weighed heavily on the broader markets  further. Punjab and National Bank led the gains while State Bank of India was also bullish. SBI rose on healthy Q3 results.

PSU Bank stocks defied the broad-based trend to trade in the fast lane. Bank of Baroda, Bank of India and Union Bank outperformed as the focus is on quarterly earnings.

Banking and Financial Services stocks are under focus due to RBI’s MPC meeting and major Q3 earnings. The new week will have also US inflation data, among other global cues, in focus.

The Reserve Bank of India (RBI) on Sunday rescheduled its monetary policy committee (MPC) meeting, which was to begin from February 7 to February 8.

The decision to postpone the MPC meeting by a day was taken by RBI as the Maharashtra government has declared a public holiday on Monday to mourn the death of legendary playback singer Lata Mangeshkar, who passed away earlier today. The MPC meeting will now be held between February 8 to 10, 2022.

Indices extend losses with benchmarks diving steeply. At around 1.05 pm, BSE Sensex was trading at 57,793.03 down 851.79 points or 1.45% and Nifty50 at 17,270.75 down 245.55 points or 1.4%.

Nifty Bank was trading at 38,188.40 down 600.95 points or 1.55%, and Private Bank at 19,229.60 down 360.25 points or 1.84. Nifty Financial Services were also under pressure at 17,691.60 down 380.10 points or 2.10%. Nifty PSU Bank defied bearish markets to trade higher at 3,060.75 up 68.45 points or 2.29%.

The Punjab National Bank (PNB) was 1.8% higher at Rs42.25 per piece. The Bank has reduced the interest rate on its savings account for balances below Rs10 lakh to 2.75% per annum. The bank has also reduced the interest rates on savings account for balances above Rs10 lakh to below Rs500cr to 2.80%. 

SBI rose over 3% before trimming gains. It was trading at Rs534.65, up 0.82%. The Bank has registered its highest quarterly standalone net profit of Rs8,432cr in Q3FY22, up 62.27% yoy, compared with Rs5,196cr in the corresponding quarter last year. Net interest income rose 6.48% yoy to Rs30,687cr in Q3FY22 from Rs28,820cr in Q3FY21.

Federal Bank and Bandhan Bank were also trading higher. HDFC Bank, IndusInd Bank, Kotak Bank, ICICI Bank and RBL Bank are under heavy selling pressure.

Bank of Baroda’s (BoB) rose 6.1% at Rs113.05 per piece. The Bank’s standalone profit after tax (PAT) doubled to Rs2,197cr in the quarter ended in December aided by healthy growth in net interest income (NII) and on lower provisions.

Financial Services stocks led by HDFC trio and Bajaj twins were under pressure also. 

Union Bank of India was 5% higher at Rs50.40 per piece, ahead of quarterly earnings. Infosys Finacle, a wholly-owned subsidiary of Infosys and Union Bank of India has joined hands to offer banking services on WhatsApp to the bank’s customers.

Indian Bank advanced 4.5% at Rs58.25 per piece ahead of quarterly earnings annoucement.

Bank of India (BoI) also advanced 3.1% at Rs58.25 per piece. The Bank reported a 90% yoy jump in third quarter standalone net profit at Rs1,027cr against Rs541cr in the year ago period, supported by a steep drop in total provisions.

Private lender, City Union Bank’s net profit rose 15% yoy to Rs196cr in Q3, due to lower provisioning requirements. However, its operating profit declined 17.4% yoy to Rs370cr, while total income dropped 5.7% yoy to Rs1,195cr in Q3FY22. The company’s stock was down 2.25%.