PSU bank stocks tumble up to 20% as early counting trends lower than exit poll predictions
PSU bank stocks dropped up to 20% on BSE as BJP-led NDA led in early election trends, defying exit polls. Central Bank, Union Bank, Canara Bank, PNB, and others saw significant declines. Analysts favor private banks like ICICI and HDFC amid political uncertainty. Shares of the State Bank of India cracked 19%. Meanwhile, Punjab National Bank, Bank of Baroda, Canara Bank, and Bank of Maharashtra also shed between 17-20%.
fell sharply by up to 20% on Tuesday in intraday trade on the BSE, following early trends showing the with an upper edge. However, the early numbers did not align with exit polls, causing .Shares of , (PNB), , and Union Bank tumbled 20% and hit the lower circuit, while Bank of Baroda, Indian Overseas Bank, and saw a decline of over 19%. India's largest PSU bank, SBI, dropped 18.5%. Meanwhile, Punjab and Sind Bank, UCO Bank, Bank of Maharashtra, and Bank of India plunged 17-18%.
As per early data till 11:10 am, the BJP-led NDA was ahead in 289 seats out of 543 seats, while the INDIA alliance was leading in 233 seats, with others leading in 21 seats. This contrasts with earlier exit poll surveys, which, after the 7th phase of elections on Saturday, indicated a likely BJP victory with the NDA securing over 370 seats.
Earlier last week, remained overweight on financials and , favouring ICICI Bank and SBI.
Meanwhile, Sanjiv Bhasin, Director of , expressed bullishness on HDFC, ICICI, Axis, and Kotak, highlighting RBL as a potential outperformer. He noted that private large-cap banks should perform well for the rest of the year, maintaining an overweight stance on these banks.
Last week, identified SBI, Canara Bank, and Bank of Baroda among its list of 54 "Modi stocks," referring to companies or sectors benefiting directly from government policies under Prime Minister Narendra Modi.
During (from June 2019 to May 2024), 10 out of 12 PSU bank stocks delivered of up to 473%. According to Ace Equity data, Indian Overseas Bank was the top performer among PSU banks, delivering 473% returns during the Modi 2.0 tenure. Bank of Maharashtra and UCO Bank followed with returns of 325% and 226%, respectively. Central Bank of India, State Bank of India (SBI), Indian Bank, Canara Bank, Punjab & Sind Bank, , and Bank of Baroda provided returns ranging from 106% to 150% over the last five years.
(Disclaimer: The views expressed by experts are their own and do not necessarily reflect those of The Economic Times)
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Source: Stocks-Markets-Economic Times
