Shares in PSU banking stocks soared in trade as investors bet heavily on these banks improving their non performing assets in the coming months.
Shares in Allahabad Bank were the biggest gainer with the stock jumping 7 per cent in trade. Other stocks that moved up were Bank of India, Indian Bank and Syndicate Bank all of which rallied as much as 4 per cent.
Punjab National Bank on the other hand was up 5 per cent, while Union Bank was up 3 per cent in trade.
For many quarters now, PSU banking or government owned banking stocks have been the worst performers in trade. The quarterly numbers have been weak and there was a continued worries over poor asset quality. However, the belief now is that the worst for the sector may now be behind us.
There are increasingly hopes that economic recovery would lead to solid performance from the PSU Banking stocks. The next few quarters could provide true test for these stocks.