PSU banks extend gain; Union Bank surges 14% in two days

SBI, PNB, Bank of Baroda, Bank of India, Canara Bank, Union Bank of India and Syndicate Bank are up 2-4% on NSE.

Shares of state-owned banks are trading higher by up to 4%, extending their previous day’s rally, after the finance minister Arun Jaitley said that government is taking steps to professionalise the management of PSU banks and help them strengthen their risk management system.

State Bank of India (SBI), Punjab National Bank, Bank of Baroda, Bank of India, Canara Bank, Union Bank of India and Syndicate Bank are up 2-4% on the National Stock Exchange (NSE). Most of these stocks had rallied between 1-8% on Thursday.

CNX PSU Bank index, the largest gainer among sectoral indices, was up 3% at 3,642 points compared to 0.4% rise in CNX Nifty and 1% gain in Bank Nifty at 1050 hours.

In past two trading session, CNX PSU Bank index surged 5.4% against less than 1% rise in benchmark index and 2% gain in Bank Nifty.

Union Bank of India was up 4% to Rs 222, rallied 14% in past two trading session from Rs 197 on NSE. SBI up nearly 3% at Rs 2,535 too gained 5% in two trading sessions.

Meanwhile, global financial services major Bank of America-Merrill Lynch said the India’s gross domestic product (GDP) growth rate in the first quarter of this fiscal year is likely to be around 6%, up from 4.6% in March, driven up by higher industrial growth, a PTI report suggests.

Boosted by higher industrial growth, GDP in the first quarter of the current fiscal year is expected to have expanded by around 6 per cent, Bank of America-Merrill Lynch said.

GDP data is due to be released on August 29. Going forward, India's economic growth rate is expected to revive to 5.4% this fiscal year and would upgrade to 6.5% in the next financial year (FY16).