State Bank of India (SBI), ICICI Bank, Andhra Bank, Bank of Baroda (BOB), Allahabad Bank, Punjab National Bank and Indian Overseas Bank rebounded from their intra-day lows and were up more than 2% each.
At 01:17 PM, Nifty Bank index was up 1.5% at 14,148 as compared to 0.39% rise in the Nifty 50 index.
The banking index hit a high of 14,161, gaining 754 points from intra-day low. The index touched a low of 13,407, down 384 against its Friday’s close of 13,791, after the Finance Minister have made allocation of Rs 25,000 crore for recapitalisation of public sector banks in Union Budget 2016, which is lower than market expectation.
Nifty PSU Bank index was up nearly 4% at 2,101, bouncing back 6% from intra-day low of 1,976 on the NSE.
There is still enough legroom for increasing the amount earmarked for recapitalization of PSU Banks. Keeping fiscal deficit under check will give headroom to RBI to cut rates much earlier than anticipated, said Mr. Gaurav Bhandari MD – Sales, Centrum Broking.
IDBI Bank has surged 14% to Rs 63.45 on back of heavy volumes after the Finance Minister said that the government has option to reduce stake in the bank below 50%.
Finance Minister Arun Jaitley in his speech on Union Budget 2016-17 in Lok Sabha today, 29 February 2016, said that the process for transformation of IDBI Bank has already started. The government is looking at options to reduce government stake below 50% for banks, he added.
The Government of India held 80.16% stake in IDBI Bank (as per the shareholding pattern as on 31 December 2015).
The trading volumes on the counter jumped nearly eight-fold with a combined 24.16 million shares changed hands on the NSE and BSE so far.