BSE PSU index hits 52-week high

Thus far in 2016, the S&P BSE PSU index outperformed the market by surging 17% against 6% gain in Sensex.

Shares of public sector undertakings (PSU) including banks were in focus with the S&P BSE PSU index hitting 52-week high of 8,017 on BSE in intra-day trade, after a sharp rally in banking and metal stocks.

State Bank of India (SBI), Punjab National Bank (PNB), Vijaya Bank, Dena Bank, Bank of Maharashtra, Bank of Baroda, Oriental Bank of Commerce, Indian Overseas Bank, Corporation Bank, Uco Bank, Bank of India and Union Bank of India from the banking sector, rallied between 8% and 16% on the BSE.

Hindustan Copper, MMTC, Rural Electrification Corporation (REC), Moil, Steel Authority of India (SAIL), Shipping Corporation of India, National Aluminium and Power Finance Corporation (PFC) from the metal and other sectors were up in the range of 4% to 8%.

At 11:22 am, the S&P BSE PSU index was up 3.7% at 8,014, as compared to 1.8% rise in the S&P BSE Sensex.

Thus far in 2016, the S&P BSE PSU index has outperformed the market by surging 17% against 6% gain in the benchmark index.

Most of the state-owned bank shares were up in past two trading sessions after the Government of India declared on Tuesday that the five hundred and one thousand rupee notes will no longer be legal tender from midnight, 8th November 2016.

According to CRISIL Research, the government’s stunning move late on Tuesday to demonetise Rs 500 and Rs 1,000 currency notes by replacing the former and discontinuing the latter – and announcing a new Rs 2,000 note -- will have a transitory impact on GDP growth in the short term, but will spell significant structural benefits over the long term.

Over the long term, however, the move could change the face of the Indian economy; improve the government’s fiscal position and tax compliance. The size of the cash economy will shrink, as will black money generation avenues, because of better cash-flow trails. Inflation would tread down as demand slows in the short term, but the impact over the long-term would be neutral, the rating agency said.

Over the last two years, fiscal savings on account of lower oil subsidies gave the government room for infrastructure spending. Higher direct tax collections will now allow the government to further increase such spending. This is critical given that private infrastructure investments remain weak. It will also have positive spillover effects on employment and income, added report.

COMPANY	LATEST	PREV CLOSE	GAIN(%)
VIJAYA BANK	49.50	43.05	14.98
DENA BANK	38.00	33.80	12.43
BANK OF MAHA	31.15	28.35	9.88
I O B	26.85	24.45	9.82
BANK OF BARODA	164.25	151.15	8.67
UCO BANK	36.10	33.25	8.57
ANDHRA BANK	56.50	52.05	8.55
UNION BANK (I)	139.50	128.60	8.48
ORIENTAL BANK	124.90	115.35	8.28
ST BK OF INDIA	281.15	259.75	8.24
PUNJAB NATL.BANK	154.10	142.45	8.18
S B T	596.00	551.00	8.17
ST BK OF BIKANER	761.10	703.75	8.15
CORPORATION BANK	43.25	40.00	8.13
SYNDICATE BANK	71.00	65.80	7.90
BANK OF INDIA	118.45	109.90	7.78
HIND.COPPER	60.80	56.45	7.71
ALLAHABAD BANK	73.75	68.50	7.66
NMDC	133.80	124.35	7.60
J & K BANK	67.40	63.20	6.65