Even as Sensex has erased most of the day's losses and is hovering close to 52,000 levels at the time of writing this copy, weakness is extending in the PSU Banking space, with Nifty PSU Bank down over 3 percent.
All of the constituents of the pack barring Jammu and Kashmir Bank are trading weak with losses in the range of 1.71-3.87%.
Individually, Bank of Baroda traded lower by 3.85% and hit an intra-day low of Rs. 77.05, PNB also fell over 3% to day's low of Rs. 38.9, Canara Bank slipped over 6.5% to Rs. 141.45, Bank of India traded weak by 2.72%, SBI fell over 4% to day's low price of Rs. 402.65.
Notably, the PSU Bank space is seeing a sell off despite a bullish take on the sector by most analysts. Analyst at Nippon India MF is of the view that valuations for many PSU Banks are justified as they are trading below book value. Further with expectations that credit cycle will pick up going forward, these banks will do well.
Another positive for the PSU Banking space is that these banks are low on lending to the retail segment and hence there will be lesser impact owing to the Covid 19 wave.