PSU bank stocks recover early losses; end up to 10% higher

Bank stocks today bounced back from early losses to end with gains of up to 10 per cent.

IDBI soared 10.22 per cent, Oriental Bank of Commerce 6.08 per cent, Union Bank of India 4.72 per cent, Allahabad Bank 4.07 per cent, Indian Bank 3.55 per cent, Bank of Baroda 3.01 per cent, Canara Bank 2.91 per cent and State Bank of India 0.82 per cent on BSE.

Shares of Punjab National Bank also rose by 1.38 per cent after falling 4.74 per cent during the day.

All these stocks had fallen in the morning trade but recovered later during the trading session.

"Market traded in a range bound manner due to mixed trend in global market, but recouped the losses as banking stocks outperformed due to improvement in financial market liquidity," said Vinod Nair, Head of Research, Geojit Financial Services Ltd.

"... the PSU banking basket came back smartly and eventually managed to lift the traders' sentiments to reclaim the 10,400 mark," said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking.

RBI yesterday barred banks from issuing guarantees in the form of letters of undertaking (LoU) as it clamped down on the import financing route used by fugitive jeweller Nirav Modi and his uncle Mehul Choksi for allegedly committing India's biggest bank fraud.