PSU banks extend gain; Canara Bank, Oriental Bank up over 5%

In past two trading sessions, the Nifty PSU Bank index gained 7.9% against 1.2% rise in the Nifty 50 index.

Shares public sector banks (PSBs) were trading higher for the second straight day and rallied by up to 7% on the bourses on the back of heavy volumes.

Canara Bank, Oriental Bank of Commerce, Bank of India and Allahabad Bank have surged more than 5% each, while State Bank of India (SBI), Bank of Baroda, Union Bank of India, Indian Overseas Bank, Syndicate Bank and Punjab National Bank (PNB) up 3%-4% on the National Stock Exchange (NSE).

At 11:49 AM, Nifty PSU Bank, the largest gainer among sector indices was up 4% at 2,293 points as compared to a marginal 0.07% gain in Nifty 50 index.  In past two trading sessions, the PSU bank index gained 7.9% against 1.2% rise in the benchmark index.

The government's latest efforts to boost domestic steel sector augur well for PSU banks as they have significant exposure to the steel sector.

The government set floor price or Minimum Import Price (MIP) on import of a total of 173 steel products into the country in a bid to restrict cheap steel imports which has adversely affected the domestic steel industry. As per a notification issued by Directorate General of Foreign Trade on Friday, 5 February 2016, the government has imposed MIP ranging from $341 per tonne to $752 per tonne on various steel products. The MIP will be in place for a period of 6 months.

Among the individual stocks, Canara Bank surged 7% to Rs 206, extending its Friday’s 6% gain on the NSE. The stock gained 16% from its 52-week low of Rs 178 touched in intra-day trade on Thursday, February 4.

Bank of India soared 6% to Rs 104 after the bank said that the board of directors of the Bank will meet on February 11, 2016, to discuss the capital raising plans of the bank. On Friday, the stock gained 5%.

PNB was up 3% at Rs 97.35 extending its previous day’s 4% gain on the NSE. On Friday, after market hours, the bank said in terms of board and regulatory approvals, the bank has raised Rs 1,500 crore Tier-2 (Basel III compliant) capital bonds at annual coupon of 8.65% on private placement basis.

Meanwhile, the Nifty PSU Bank index closed 52-week low of 2,124 on Thursday, February 4, 2016, fallen 31% in past three months as compared to 8% decline in the Nifty 50 index.

Symbol

LTP* % Chng 52-wk high 52-wk low NIFTY PSU BANK 2292.95 4.16 4064.80 2097.00 CANBK 206.25 6.89 456.00 167.35 BANKINDIA 104.10 6.50 260.80 90.00 ORIENTBANK 111.80 6.48 265.00 98.60 ALBK 55.00 5.77 115.60 48.75 UNIONBANK 138.65 5.00 222.70 108.15 BANKBARODA 132.55 4.41 216.30 116.30 SBIN 175.10 4.10 315.00 160.20 ANDHRABANK 53.70 3.47 91.35 49.10 SYNDIBANK 61.80 3.26 127.00 56.35 IOB 26.05 3.17 56.25 23.90 PNB 97.35 2.80 180.55 86.50 IDBI 58.25 2.19 95.70 52.30   *LTP - last traded price on NSE at 11:49 AM.     Source: NSE