Shares of Punjab National Bank (PNB), Indian Overseas Bank (IOB), Corporation Bank , Andhra Bank and Allahabad Bank surged in early trade on Wednesday boosted by reports of government capital infusion, but lost breadth towards the second half of the trading amid sustained selling.
Shares of state-run banks – Punjab National Bank (PNB), Indian Overseas Bank (IOB), Corporation Bank , Andhra Bank and Allahabad Bank surged in early trade on Wednesday boosted by reports of government capital infusion.
The stocks, however, lost breadth towards the second half of the trading amid sustained selling that was evident in other sectors as well, particularly metal, auto, realty and telecom stocks. The Nifty PSU bank index which initially surged as much as 1.5 percent in the day, declined by 0.84 percent. BSE Bankex also declined over half a percent today.
In early trade, shares of Indian Overseas Bank (IOB) rose as much as 13.8 percent to their highest since June 26, posting biggest intraday gain since October 25, 2017. However, it settled at Rs 13.90, only gaining 3.04 percent in the end. Intra-day, it traded between Rs 15.32 and 13.75.
PNB stock gained as much 4.1 percent to Rs 81.90, but closed 4.32 percent lower at Rs 75.30 on the NSE. Allahabad Bank stocks ended lower by 2.84 percent at Rs 41.
Corporation Bank shares hit 4-week high rising as much as 10.1 percent to Rs 28.95, but just posted gains of 2.64 percent, closing at Rs 27.20 on the BSE.
Andhra Bank shares rose over 5 percent to Rs 32.6 intra-day but closed at Rs 30.55, declining by 1.29 percent. The stock had opened at 32.35, and traded between a high of Rs 32.60 and a low of Rs 29.95 on the NSE.
The Modi government announced capital infusion of Rs 11,337 crore in Punjab National Bank, Indian Overseas Bank, Andhra Bank, Corporation Bank and Allahabad Bank.
Of the Rs 11,337 crore, Rs 2,816 crore will be infused in PNB, Rs 2,555 crore in Corporation Bank, Rs 2,157 crore in IOB, Rs 2,019 crore in Andhra Bank and Rs 1,790 crore in Allahabad Bank.
Out of these five banks, Corporation Bank, Allahabad Bank and IOB are under the prompt correction action of RBI.
The government is expected to infuse another tranche of capital in few more banks by September end.