PSU banks recover lost ground on value-buying

Shares of recently beaten-down public sector banks saw some recovery at the fag-end of the trading session on value-buying at lower levels.
Shares of Indian Overseas Bank which had tumbled 9.24 per cent during the day, finally ended the trade at Rs 23.85, up 0.21 per cent on BSE.
IOB had fallen during the day after S&P put the lender on 'CreditWatch' with negative implications.
Bank of India too gained 0.76 per cent after falling 6.53 per cent during the day after the ratings agency revised the outlook on the firm to negative from stable as it sees the asset quality of the state-run lender weakening over 12-18 months, straining its profitability.

SBI climbed 1.76 per cent, IDBI Bank 1.44 per cent, Syndicate Bank 1.26 per cent and Punjab National Bank was up 0.14 per cent.
Among others, Union Bank of India rose by 1.19 per cent and Oriental Bank of Commerce was up 1.10 per cent.

Most of these stocks, led by IOB, tumbled up to 9 per cent during the day after S&P said capital requirements of PSU lenders for provisioning of bad loans are likely to shoot up, exposing them to possible downgrades.
Meanwhile, recovery was also seen in the broader market where the Sensex rebounded by 190 points to finish at 23,381.87.

Capital requirements of PSU banks for provisioning of bad loans are likely to shoot up exposing them to possible downgrades, S&P said yesterday as it trimmed outlook on Bank of India to 'negative' from 'stable'.
Hit hard by mounting bad loans, many leading state-owned banks reported their highest ever quarterly losses totalling over Rs 12,000 crore, while banking majors like SBI and PNB witnessed sharp erosion in profits.