 "Nifty PSU Bank index falls 5% on profit booking post RBI policy")
Shares of public sector undertaking (PSU) banks fell by up to 7% on the bourses on profit booking despite Reserve Bank of India's reduction in repo rate by 25 bps which was in-line with economists' expectations.
State Bank of India (SBI), Oriental Bank of Commerce, Andhra Bank, Canara Bank, Union Bank of India, Bank of India (BoI), Bank of Baroda (BoB) and Punjab National Bank dropped more than 5% each on the National Stock Exchange (NSE).
The Nifty PSU Bank index closed down by 5% at 2,356 points as compared to 3% decline in Nifty Bank index and 2% fall in Nifty 50 index.
PSU bank index had rallied 15% in post Budget rally since February 29, as compared to 12% rise in Nifty Bank and the benchmark index till yesterday.
Indian Bank, Syndicate Bank, Allahabad Bank and Central Bank of India had zoomed more than 30% each, while Union Bank of India, Uco Bank, Indian Overseas Bank, Corporation Bank and Canara Bank surged between 25%-30% during the period.
According to CRISIL Research, by restricting the repo rate cut to 25 bps, the RBI has reiterated that it continues to adopt a cautiously accommodative monetary policy stance given the prevailing economic uncertainties.
Moreover, with banks moving to the Marginal Cost of Funds based Lending Rate (MCLR) system since 1 April’16, the lending rates of banks have already seen a decline (estimated to be 25 to 50 bps), warranting a lower rate cut by the RBI.
The liquidity measures announced will help ease the liquidity conditions in the system and well as help in the transmission of lower interest rates. We expect the RBI to cut repo rates by another 25 bps in 2016, CRISIL said on the monetary policy review.
State Bank of India (SBI), Oriental Bank of Commerce, Andhra Bank, Canara Bank, Union Bank of India, Bank of India (BoI), Bank of Baroda (BoB) and Punjab National Bank dropped more than 5% each on the National Stock Exchange (NSE).
The Nifty PSU Bank index closed down by 5% at 2,356 points as compared to 3% decline in Nifty Bank index and 2% fall in Nifty 50 index.
PSU bank index had rallied 15% in post Budget rally since February 29, as compared to 12% rise in Nifty Bank and the benchmark index till yesterday.
Indian Bank, Syndicate Bank, Allahabad Bank and Central Bank of India had zoomed more than 30% each, while Union Bank of India, Uco Bank, Indian Overseas Bank, Corporation Bank and Canara Bank surged between 25%-30% during the period.
According to CRISIL Research, by restricting the repo rate cut to 25 bps, the RBI has reiterated that it continues to adopt a cautiously accommodative monetary policy stance given the prevailing economic uncertainties.
Moreover, with banks moving to the Marginal Cost of Funds based Lending Rate (MCLR) system since 1 April’16, the lending rates of banks have already seen a decline (estimated to be 25 to 50 bps), warranting a lower rate cut by the RBI.
The liquidity measures announced will help ease the liquidity conditions in the system and well as help in the transmission of lower interest rates. We expect the RBI to cut repo rates by another 25 bps in 2016, CRISIL said on the monetary policy review.
| Name | 29/02/2016 | 04/04/2016 | % chg | 05/04/2016 | % chg |
| Oriental Bank | 76.45 | 95.45 | 24.85 | 89.45 | -6.29 |
| Canara Bank | 158.45 | 198.35 | 25.18 | 186.35 | -6.05 |
| Union Bank (I) | 106.95 | 137.40 | 28.47 | 129.35 | -5.86 |
| Bank of India | 83.30 | 99.75 | 19.75 | 94.20 | -5.56 |
| Andhra Bank | 46.10 | 54.95 | 19.20 | 51.95 | -5.46 |
| UCO Bank | 31.70 | 40.60 | 28.08 | 38.40 | -5.42 |
| SBI | 158.75 | 194.70 | 22.65 | 184.35 | -5.32 |
| Allahabad Bank | 43.35 | 57.20 | 31.95 | 54.50 | -4.72 |
| Bank of Baroda | 131.90 | 151.45 | 14.82 | 144.35 | -4.69 |
| PNB | 71.00 | 86.85 | 22.32 | 82.80 | -4.66 |
| IDBI Bank | 58.55 | 71.20 | 21.61 | 68.15 | -4.28 |
| United Bank (I) | 17.95 | 20.40 | 13.65 | 19.65 | -3.68 |
| Corporation Bank | 32.00 | 40.35 | 26.09 | 39.05 | -3.22 |
| Punjab & Sind Bank | 32.15 | 35.75 | 11.20 | 34.75 | -2.80 |
| Syndicate Bank | 51.10 | 69.60 | 36.20 | 67.70 | -2.73 |
| Indian Bank | 76.05 | 105.25 | 38.40 | 102.45 | -2.66 |
| Dena Bank | 26.00 | 30.15 | 15.96 | 29.35 | -2.65 |
| Vijaya Bank | 31.10 | 32.40 | 4.18 | 31.55 | -2.62 |
| Central Bank | 58.55 | 76.65 | 30.91 | 74.95 | -2.22 |
| IOB | 24.25 | 31.05 | 28.04 | 30.40 | -2.09 |
| Nifty 50 | 6987.05 | 7758.80 | 11.05 | 7603.20 | -2.01 |
| Nifty PSU Bank | 2037.10 | 2483.30 | 21.90 | 2355.80 | -5.13 |
| Nifty Bank | 13946.40 | 16190.60 | 16.09 | 15695.00 | -3.06 |
| Price on NSE in Rs | |||||
