The index Nifty Bank is trading in the green, however, the upside is broadly led by PSU bank stocks as they emerge investors preferred pick on New Year’s day compared to private lenders.
At around 1.45 pm, Nifty PSU Bank was trading 1,795.90 above 43.20 points or 2.46%. The index has surged to an intraday high of 1,801.10.
Meantime, Nifty Private Bank trades flat at 17,250.95.
On Nifty PSU Bank, Punjab National Bank led the pack surging by nearly 5% followed by Bank of Maharashtra and Bank of Baroda by gaining over 4% each.
Stocks like J&K Bank, UCO Bank, Indian Bank and Bank of India advanced between 2-3%. While Central Bank of India and Canara Bank added nearly 2% gain.
SBI, Union Bank and Indian Overseas Bank surge near 1% each.
Overall, Nifty Bank was performing flat at 31,251.15 with PNB, Bank of Baroda and SBI offsetting the losses by surging between 1-5%.
In the latest development, banks are set to implement a new cheque acceptance system starting January 01, 2021. The new system is aimed to minimise the number of fraudulent cheque transactions across India.
Further, on the New Year’s day, banks in cities like Aizawl, Chennai, Gangtok, Imphal, Shillong are closed. In other cities, these financial institutions are opened.
Notably, rating agency CLSA expects a gradual recovery in banks credit growth to between 8-9.5% by financial year FY22/23. The rating agency believes that with a weak CAPEX cycle, bank’s retail growth needs to recover to over 15% YoY growth.