PSBs extend gains; Indian Bank, Bank of India up over 3%

In past two trading sessions, Nifty PSU Bank index was up 4.4% against 1% rise in the Nifty 50 index

Shares of public sector banks (PSBs) were trading higher for the second straight day in a row amid softening of the yield on the 10-year gilt, following the Reserve Bank of India (RBI’s) open market operation announcement on Friday.

Indian Bank surged 7% to Rs 344, extending its previous day’s 3.5% gain on the National Stock Exchange (NSE). Bank of India up 4%, while IDBI Bank, Andhra Bank, Union Bank of India, Bank of Baroda, Canara Bank, Syndicate Bank, Oriental Bank of Commerce and State Bank of India (SBI) were up 2% to 3% on the NSE.

At 12:17 pm; Nifty PSU Bank index, the largest gainer among sectoral indices, was up 2.3% at 2,905 as compared to 0.15% rise in the Nifty 50 index. In past two trading sessions, the PSU bank index was up 4.4% against 1% rise in the benchmark index.

The RBI on Friday said it would buy Rs 100 billion of securities with maturities ranging from 2020 to 2033 on May 17.

This, coupled with the recent measures taken to allow foreign investors to pick up any security they want without any maturity restriction, should help boost bond market sentiment by adding liquidity, Angel Broking said in a note.