Privatisation hope lifts Nifty PSB index 5%; BoI, IOB gain 40% in 2 days

Finance Minister Nirmala Sitharaman proposed to divest stake in two PSBs while unveiling Budget 2021 proposals

Public sector banks were ruling higher for the second day in a row as investor sentiment remained buoyant amid privatisation buzz. The Nifty PSU Bank index defied market gravity and surged 5.6 per cent to hit an intra-day high of 2,446 on the National Stock Exchange (NSE) as against a 0.6 per cent drop in the Nifty50 index. 

On Tuesday, a Reuters report suggested that the government has shortlisted four mid-sized state-run banks -- Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India -- for privatisation. 

"Two of those banks will be selected for sale in