Even as Fitch on Monday revised its long term issuer default ratings on 9 Indian banks from stable to 'negative', with stocks on the list being from both the public and private banks such as EXIM Bank, SBI, BOB, Bank of Baroda (New Zealand), Bank of India, Canara Bank, Punjab National Bank, ICICI Bank and Axis Bank. There is seen surge in banking stocks in trade today, in fact the gains on June 23, 2020 are led by Nifty PSUBank index up 3.21%, which is 3 months high for the index.
Stocks contributing the most to the Nifty PSU bank movement are SBI, Union Bank, PNB, Indian Bank, Bank of Baroda.
Jammu & Kashmir Bank, Indian Bank, Union Bank all surged up to 10% nearly, while others including PNB, SBI, OBC were up between 0.7%-4%
It has been a fourth consecutive day of gains for the index.
As per experts as the estimated impact of Covid 19 is better than expected, low valuations and there is also the impact of Unlock 1.
Also, the underperforming sector has the potential to push Nifty towards 11000, when currently it trades at around 10300. At the same time, the overhang that the sector faces in terms of likely NPA increase on account of lockdown and contours in relation to loan growth cannot be ignored.