smelly The PSU Bank index jumped 3.56 per cent to Rs 3,900.70 on Friday morning amid rally in Adani Group shares. PSU banks such as State Bank of India (SBI), Bank of Baroda, Punjab & Sind Bank, Union Bank of India, UCO Bank, Bank of India, Bank of Maharashtra and Indian Overseas Bank were in the range of 4 per cent to 7 per cent. Percent.
On March 2, promoters of the Adani Group sold shares worth Rs 15,446 crore in four of its listed entities to GQG Partners, a US-based global equity-investment boutique firm.
Adani Enterprises sold shares worth Rs 5,460 crore, Adani Ports & SEZ Rs 5,282 crore, Adani Green Energy Rs 2,806 crore and power distributor Adani Transmission Rs 1,898 crore.
The proceeds will be used to repay the loan and for other purposes. The high debt level is a major concern for traders and investors and was also flagged by US short-seller Hindenburg Research, which in a report accused the group of share manipulation and other wrongdoings, leading to the collapse of group companies. Shares declined.
Shares of banks declined on concerns over exposure to the Adani group. The decline in stock prices even led some banks to call for additional mortgages.
Partha Nyati, Founder, TradingO said: “After a prolonged bearish period, the market is currently experiencing a significant rally led by BankNifty. The market sentiment has changed as a result of global market recovery and relief on the Adani case , which is fueling a significant short-covering move. The India VIX was near a multi-month low, so, despite extreme selling conditions in the market, there was no panic. There are indications that the market has taken a Base has been established and looks set to rise, but US bond yield signals will be important.”
What should investors do?
Nyati said: “Technically, the 20-DMA of 17700 will be an important hurdle for Nifty; Above that, we can expect some meaningful strength in the market.”
“Both the PSU banking sector and all PSU stocks are something we see as strong. PSU banks will continue to do well as they are fundamentally in a healthier state and the outlook is still positive. In terms of Nifty PSE index, it is set for a multi-year breakout, and if it happens, we can expect a significant outperformance in the PSU sector over the next few months.”
Most banks (especially PSBs) have seen a decent recovery as a result of Adani Group’s risk-averseness; Analysts at Emkay Global Financial Services believe that the probability of default will be very low for the time being.
Also, banks are witnessing an uptick in earnings due to better growth/margins and declining loan loss provisions (LLPs), which coupled with strong provisions/capital buffers provide additional comfort. Thus, we believe that the recent correction in some fundamentally strong bank stocks provides a good re-entry point. Within PSBs, we like BoB, SBI and Indian Bank, given their healthy return ratios, capital buffers and ability to deliver reasonable valuations, the brokerage firm said in its February report.
Disclaimer:Disclaimer: The views and investment tips given by the experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decision.
read all latest business news Here
