PSU Banks in focus; Union Bank, Oriental Bank up over 5%

In past one-week, Nifty PSU Bank index surged 7.6% against 2.3% gain in Nifty 50 index.

Shares of public sector undertaking (PSU) banks are in focus and trading higher by up to 10% on the bourses in noon deals.

Union Bank of India, Oriental Bank of Commerce, Allahabad Bank, Canara Bank and IDFC Bank were up more than 4% each, while Syndicate Bank, Bank of India, State Bank of India, Bank of Baroda, Indian Overseas Bank and Punjab National Bank were up between 1%-3% each.

At 12:39 p.m. Nifty PSU Bank index, the largest gainer among sectoral indices was up 1.9% as compared with 0.51% rise in Nifty 50 index. In the past one-week, the PSU bank index surged 7.6% against 2.3% gain in the benchmark index.

Between November 20, 2015 and January 20, 2016, Nifty PSU Bank index had tanked 30% on assets quality concerns. The Nifty 50 index was down 7% during the same period.

According to media reports the Finance Ministry is considering infusing more than the announced Rs 70,000 crore in public sector banks to help strengthen their balance sheets.

An announcement to this effect could be made next month by Finance Minister Arun Jaitley in the Budget 2016-17 if the government decides to expand the capital infusion programme, the PTI report suggests last week quoting a ministry official, adding that the plan is at a preliminary stage and no decision has been taken so far. CLICK HERE TO READ FULL REPORT.

Among the individual stocks, Union Bank of India was up 9% to Rs 129 on the NSE. Oriental Bank of Commerce up 6% at Rs 115, followed by Allahabad Bank and Canara Bank up 4% each at Rs 55 and Rs 192 respectively.