Shares of public sector undertaking (PSU) banks have surged on the National Stock Exchange (NSE) with the Nifty PSU Bank index rallying nearly 10% on reports that the government is likely to announce a series of banking reforms in the days to come. CLICK HERE TO READ FULL REPORT.
Bank of Baroda, Uco Bank and Union Bank of India have rallied more than 10% each, while State Bank of India (SBI), Syndicate Bank, Oriental Bank of Commerce, Allahabad Bank, Andhra Bank, Bank of India and Vijaya Bank up between 7%-10% on the NSE.
At 13:15 PM, Nifty PSU Bank index was up 10.4% as compared to 2.6% gain in the Nifty 50 index.
Earlier, in May 18, 2009 the PSU bank index had zoomed 17.77%, followed by 10.06% rally in May 19, 2009, after the big victory of the Congress-led UPA government in the general elections.
Shares of most of the PSU banks hit their respective 52-week lows in last week and have seen market value erosion of more than 40% from their 52-week highs.
On February 12, 2016, the Nifty PSU Bank index closed at 1,984 had fallen 45% in past six months from 3,576 points.
Among the individual stocks, Bank of Baroda, the largest gainer among PSU pack, was zoomed 25% to Rs 142 on the NSE in intra-day trade, after the bank management said that it is confident that the bank will make profit in Q4FY16 and expects to provide reasonable return on capital in FY17.
The management view that no further issuance of equity capital is required in the foreseeable future and has also advised the Government of India that no further support by way of infusion of equity capital is required.
Uco Bank has soared 20% to Rs 34.10 on the BSE, followed by Union Bank of India (up 10% at Rs 122), Syndicate Bank and SBI up 9% each at Rs 56.80 and Rs 169, respectively.