PSU bank shares drop up to 7%, NIFTY PSU Bank emerges as top loser

PSU bank shares including State Bank of India, Punjab National Bank and Bank of Baroda declined up to 7% on Monday, April 15, dragging the sectoral NIFTY PSU Bank index down by over 3%.

NIFTY PSU Bank emerged as the biggest loser among NIFTY sectoral indices with its all 12 constituents trading in the red.

Losses in PSU bank shares came on the heels of reports that a well -known investor and insurance behemoth booked profits in PSU bank stocks in the last quarter of FY 2023-24.

Among the losers, Maharashtra Bank and Central Bank of India dropped the most by 7% to hit a low of ₹59.35 and ₹59.55 apiece on the NSE, respectively.

Indian Overseas Bank and UCO Bank dropped up to 6%. Bank of India dropped upto 5% while Union Bank, Punjab National Bank and Indian Bank declined up to 4%.

State Bank of India, Bank of Baroda and Canara Bank also fell up to 3% in morning deals.

Following the sharp losses in the PSU bank shares, NIFTY PSU Bank declined up to 3% to emerge as the biggest sectoral loser.

The PSU Bank sectoral index however has gained more than 6% in the past month while rallied by 89% in the past year.

Canara Bank and Punjab National Bank shares have rallied up to 16% in the past month.

Meanwhile a report suggested that key investor Rekha Jhunjhunwala booked profits in Canara Bank in the March quarter as her total holdings dropped to 1.45% in the bank from a little over 2% in the December quarter.

Similarly, insurance behemoth LIC, which is a major stock market investor, also booked some profits in the PSU bank.

LIC’s stake in Canara Bank dropped to 6.21% in the March quarter against 6.3% in the December quarter of FY24.

The report, however, suggested that PSU banks may continue to gain from healthy recoveries which may boost their asset quality in the medium to long-term.

NIFTY PSU Bank was trading 1.24% lower at 7,109.45 at 12:11 am against a 0.59% slide in the benchmark NIFTY50 index.