The gains and losses of Public sector banks

Public sector banks came under profit booking, some of them for a second day, after a sharp and swift upthrust backed by heavy deliveries saw most of them gaining substantial ground over the last 6 sessions.

The two indexes, representing the broader sector, CNX Bank Nifty and CNX PSU Bank Index also slipped 0.4% and 2.6% respectively in trade versus a 0.5% rise on the benchmark Nifty.

PSU banks, which have been beaten down to multi-year lows, came back in favour after the government took a series of measures to recapitalise some of them and replaced the top individuals in at least two PSU banks with professionals from the private sector. These moves, and more, sparked a rally in the space. Now, some of those profits are being taken away from the table.

As a consequence, Allahabad Bank fell 5 percent to 93.35 rupees. UCO Bank lost 2.9 percent to 54 rupees. Canara Bank was down 2.7 percent to 338.30 rupees. Union Bank fell 2.6 percent to 207.50 rupees and Bank of Baroda was down 2.7 percent to 212 rupees.

Overall, 13 PSU banks fell between 1.1 percent and 5 percent on the futures and options space. All of them were accompanied by a rise in Open Interest.

Image credit: Indiatimes