PSU banks soar, US inflation rises & more

Blog | Market Recap

NIFTY50: 20,070 ▲ 76 (+0.3%)
SENSEX: 67,466 ▲ 245 (+0.3%)

  • Benchmark indices resumed uptrend; NIFTY50 closed above 20,000 level for the first time
  • In all, 31 of the NIFTY50 stocks closed in the green
  • Inflation rate in the US accelerated to 3.7% in August from 3.2% in July


Among the NIFTY sectoral indices, PSU Bank (+4.2%), Media (+1.5%) were the top gainers, while Auto (-0.4%) and IT (-0.2%) were the top losers.

Top gainers Today's change
Coal India
279 ▲ 8.7 (+3.2%)
Grasim 1,929 ▲ 58 (+3.1%)
Tata Consumer
890 ▲ 25 (+2.9%)


Top losers Today's change
651 ▼ 9.7 (-1.4%)
M&M 1,536 ▼ 21 (-1.3%)
Adani Ports
847 ▼ 11 (-1.3%)


⭐ Sugar companies rise on weak production outlook

Shares of sugar companies like Shree Renuka Sugars, Balrampur Chini Mills and EID Parry rose between 2% to 3% today. As per West Indian Sugar Mills Association, sugar production in Maharashtra, which is the top sugar producer, is likely to fall by nearly 14% in the 2023/24 marketing year. This is due to lower cane yields amid a deficit in rainfall in the state. This may increase domestic sugar prices improving revenue and profitability of sugar producers.  

⭐ RVNL wins new order  

The railway infrastructure company has emerged as the lowest bidder for the railway project along with its joint venture (JV) partner. This new project comes from Western Railways and is worth ₹245 crore. It involves civil engineering work, which is expected to be completed in 24 months. RVNL will hold 74% stake in this JV project. However, the company's shares declined 1.5% today amid profit booking.

⭐ Aeroflex Industries gains on space foray 

Shares of recently listed Aeroflex Industries rose more than 5% today after the company management said it plans to foray into the aerospace sector. The company is in early-stage discussions with its existing clients like HAL, BHEL and ISRO for new business opportunities. The move could help the company diversify its revenue stream.

⭐ Coffee Day share hits upper circuit 

The coffee chain operator saw its shares hit the upper circuit of 20% after the National Company Law Appellate Tribunal (NCLAT) terminated insolvency proceedings against the company. This came after Coffee Day Enterprises and IndusInd bank reached a settlement regarding outstanding debt. In July 2023, IndusInd Bank moved a petition alleging that the company had defaulted on dues of ₹94 crore.

In Focus

Investors are flocking to PSU bank stocks  


After yesterday’s fall, the NIFTY PSU Bank index saw a smart recovery today, rising 4.2% as well as touching a new 52-week high. So far in September, the index is up over 10%, outperforming the benchmark NIFTY50 index, which has risen 4.2% during the same period. What were the key factors behind this? Let’s dig in. 

PSU stocks are seeing strong traction on the back of higher credit growth across different sectors. As per the latest data released by the RBI, bank credit grew by 14.8% in July 2023. At the same time, retail loans registered a growth of 18.4%, supported by higher housing and vehicle loans. This growth came despite higher interest rates amid tightening monetary policy. 

Experts believe credit growth will remain elevated in the ongoing fiscal amid robust forecasts for the country's economic growth. Last week, global rating agency Moody's raised India’s economic growth forecast to 6.7% for 2023.  

Furthermore, the country’s largest public sector bank, State Bank of India (SBI), is targeting credit growth of 15% in FY24. The bank reported 13.9% credit growth in the April-June period. During the same period, credit offtake grew by over 16% across public sector banks.  

Besides this, combined net profit of 12 PSU banks surged by over 68% YoY to ₹73,393 crore during the first quarter of FY24, while gross NPAs declined by 23.8% YoY to ₹4.05 lakh crore. These robust operational metrics is also one of the reasons investors are turning to PSU bank stocks.

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