Nifty PSU Bank index slips 8% in 2 days; Indian Bank, BOB down up to 11%

Despite the past two days decline, the Nifty PSU Bank index has outperformed the market by surging 21%, as against 1% rise in the Nifty 50 in the past five months.

Nifty PSU Bank index movement today

 

Shares of public sector banks (PSBs) were trading lower for the second straight day, with the Nifty PSU Bank index falling 2.4 per cent on the National Stock Exchange (NSE) in Monday’s intra-day trade. In the past two trading days, the Nifty PSU Bank index has slipped 8 per cent on profit booking.

 

Among individual stocks, Indian Bank dipped 4 per cent to ₹810.60 in intra-day deals today. It has fallen 11 per cent in the past two days. The stock had hit a record high of ₹923 on January 30, 2026.

 

The stock price of Bank of Baroda (BOB) was down 3 per cent to ₹270.50 in intra-day trade, falling 10 per cent in the past two days. 

 

State Bank of India (SBI) also dipped 3 per cent to ₹990.20 on the NSE in intra-day deals. In the past two trading days, the market price of the PSU giant has dipped 8 per cent. It had hit an all-time high of ₹1,083.60 on Sunday, February 1, 2026.

 

Among others, Punjab National Bank, Uco Bank, Punjab & Sind Bank, Indian Overseas Bank and Union Bank of India from the Nifty PSU Bank index were down 2 per cent each.

 

At 11:28 AM; Nifty PSU Bank index was down 2 per cent, as compared to the 0.48 per cent decline in the Nifty 50.

 

Despite the past two days decline, in the past five months, the Nifty PSU Bank index has outperformed the market by surging 21 per cent. In comparison, the Nifty 50 was up 1 per cent during the same period.

 

Union Budget 2026-27

 

The Centre is planning to set up a high-level committee on banking for Viksit Bharat to review the sector’s structure and prepare it for India’s next phase of growth, including the creation of fewer but larger banks with stronger balance sheets. 

 

The panel is expected to examine consolidation of smaller PSU banks, bank ownership structures, and the long-standing mismatch between ownership stakes and voting rights in private banks, where voting is capped at 26 per cent. It may also review foreign ownership norms, including the 20 per cent foreign direct investment (FDI) cap in state-run banks, and push for a more uniform and transparent framework instead of case-by-case approvals. Bankers believe the review could improve capital deployment efficiency, strengthen risk oversight, and support financing of long-gestation infrastructure projects, while safeguarding financial stability, inclusion and consumer protection, ICICI Securities said in a note.

 

Meanwhile, the Centre has set a disinvestment and asset monetisation target of ₹80,000 crore for FY27, a sharp jump of nearly 135 per cent over the revised FY26 estimate of ₹33,837 crore, banking on large transactions such as IDBI Bank and LIC stake sales. Finance minister Nirmala Sitharaman said the government will pursue all cabinet-approved disinvestment proposals, signalling continuity in strategy. Additional stake dilution in select PSU banks is also planned to meet minimum public shareholding norms, the brokerage firm said a note.

 

The announcement to set up a committee to review the banking sector and align it with the Viksit Bharat theme goes a long way in demonstrating the farsighted approach of the government as the economy’s financial needs will be substantially higher in 2047 and the government seems to be critically evaluating whether the banking system in its current form would be able to cater to that demand, analysts at JM Financial Institutional Securities said.

 

The hike in securities transaction tax (STT) is negative for market sentiment, but it will aid in keeping a tab on speculative behaviour. Moreover, the non-applicability of GST on domestic brokers would be marginally positive, the brokerage firm said.

 

Although the collection from disinvestments has been lackluster since FY20, the government has increased its allocation under the heading “miscellaneous receipts” in FY27BE, which includes disinvestment proceeds. It is worth noting that the expectation has been significantly increased to ₹80,000 crore in FY27, indicating that the government may be contemplating major disinvestment initiatives across public sector banks or a stake sale in LIC, analysts said.  Disclaimer: The views expressed by the brokerage/ analyst in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.