CNX PSU Bank index hits one-month low in seven-day losing steak

Andhra Bank, IDBI Bank, Allahabad Bank, IOB, Union Bank and Syndicate Bank are down more than 5% each on NSE.

Banking shares mainly public sector undertaking (PSUs) fell for seventh straight session, touching over one-month lows on the National Stock Exchange (NSE).

The NSE CNX PSU Bank, a gauge for PSU banks, was the biggest loser among the sectoral indices, down 4.3% at 3,432 levels compared to 1.2% decline in CNX Nifty at 14:20 hours.

The banking index hit a low of 3,421, its lowest level since May 19, 2014. CNX PSU Bank index plunged 11.5% in past seven trading sessions as against 3% fall in the benchmark index.

Andhra Bank, IDBI Bank, Allahabad Bank, Indian Overseas Bank, Union Bank of India and Syndicate Bank have fallen more than 5% each.

State Bank of India, Oriental Bank of Commerce, Bank of India, Canara Bank, Punjab National Bank and Bank of Baroda are down between 3-4% on NSE.

The government has decided to reduce its stake in the public sector banks, enabling the lenders to raise equity from public though it will continue to the hold majority stake, Finance Minister Arun Jaitley said on Thursday while presenting the Union Budget for 2014-15.

“While preserving the public ownership, the capital of these banks will be raised by increasing the shareholding of the people in a phased manner through the sale of shares largely through retail to common citizens of this country,” the finance minister said while adding that state-run banks will need to raise Rs 2.4 lakh crore equity by 2018 to conform with the Basel-III norms.