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Sell call on top state-owned banks by India's equity fund managers in August seems to have backfired them.
They got caught on the wrong footing as far as their trade call on State Bank of India (SBI), Punjab National Bank (PNB) and Bank of Baroda (BoB) is concerned.
During the last fortnight, counter of SBI climbed nearly 10% while those of PNB and BoB gained 16-20%. Rather, for last few trading sessions, state-owned banks have shown strength - be it the large, mid or small cap banking companies.
Schemes like HDFC Top200, HDFC Equity, Reliance Growth, UTI Dividend Yield, Reliance Vision and SBI Contra among several others; chose to cut exposure in largest lenders. Commentary from market participants remained pessimistic for PSU banking counters.
PSU banks could find no respite and continued to fall in August. At one point of time PNB dipped to as low as Rs 402 recently on the stock exchanges while those of BoB and SBI declined to Rs 430 and Rs 1,450 levels, respectively. Amid this mayhem, fund managers kept cutting allocation to banks as their counters were hitting several years low.
However, what followed in last couple of days seem to have backfired fund managers on their sell calls on state-owned banks. After hitting 52-week low, shares of the top PSU banks rebounded sharply.
