Nifty PSU Bank Index Achieves New 52-Week High Amid Strong September Surge.

Nifty PSU Bank Index Achieves New 52-Week High Amid Strong September Surge.

Asif Iqbal | September 13, 2023 | 04:05 PM IST | Breaking News, India | Follow on Google News

Nifty PSU Bank Index Achieves New 52-Week High Amid Strong September Surge.

pic credit: mint

Santosh Meena, Head of Research at Swastika Investmart Ltd., shared insights into this remarkable rally, stating, “The Nifty PSU Bank index has broken out to multi-year highs, gaining more than 10 percent in September alone. The chart pattern suggests that this is just the beginning of a rally, but intermediate corrections cannot be ruled out.” Meena emphasized that the 4,600-4,450 range has now solidified as a robust support zone for the Nifty PSU Bank index. Should the index maintain its position above this level, it could potentially ascend to the 5,800-6,000 range.

**Broad Market Performance: Nifty’s Historic High**

Simultaneously, the broader Nifty index marked a significant milestone by closing above the 20,000 mark for the first time. It rallied 76.80 points, equivalent to 0.38 percent, to achieve an all-time closing high of 20,070. Notably, 31 of the 50 Nifty shares closed the session with gains, underscoring the prevailing positive sentiment in the market.

*Top Picks Among PSU Banks**

Market analysts have identified State Bank of India (SBI), Bank of Baroda (BoB), and Punjab National Bank (PNB) as top selections within the PSU banking segment. BoB’s shares surged by over 5 percent during the session, concluding with a 4.43 percent gain, settling at ₹208.70 apiece on the BSE. SBI also experienced gains of over 1 percent, closing at ₹596.45 per share on the BSE.

*Exploring Opportunities in Smaller PSU Banks*

Meena further suggested that investors consider diversifying their portfolios by including smaller PSU banks. These stocks, known for their high-beta characteristics, have the potential to generate substantial returns. Last month, LKP Securities identified select PSU stocks poised to deliver favorable returns in the short term, including BoB and Canara Bank. The brokerage firm projected a 37 percent upside for BoB, setting a target price range of ₹250 to ₹265 over the next 3-6 months.

**Bright Outlook for PSU Banks**

Taking a broader perspective, LKP Securities highlighted the robust growth in advances and deposits, solid liquidity positions, and attractive valuations for BoB. The granular liability profile and competitive cost of funds further enhance the bank’s position. Similarly, Canara Bank exhibited promising signs, featuring a higher top and higher bottom formation on the weekly chart, coupled with trading above critical moving averages. The stock’s potential trajectory indicates a path towards 400/430.In conclusion, the PSU banking sector’s strong recent performance, coupled with a positive outlook, suggests the potential for significant value creation and growth in the near future.

Asif Iqbal

Asif Iqbal is a seasoned news writer with a passion for delivering the latest updates to the public. Currently serving as the senior writer at VoM News, a prominent news outlet known for its comprehensive coverage of diverse topics, Asif has established himself as a reliable source of information. With a keen eye for detail and a knack for storytelling, he consistently provides readers with well-crafted articles that cover a wide range of news categories. His dedication to journalistic integrity and his commitment to staying ahead of the news curve make him an invaluable asset to Vom News, ensuring that readers are always well-informed on the issues that matter most. You can find his work and stay updated on current events by visiting vomnews.in.