Central Bank of India, Indian Overseas Bank and J&K Bank share costs hit 20 per cent upper circuit in intraday offers on BSE. On the back of the rally in these 3 stocks, Nifty PSU Bank index surged as considerably as 4.4 per cent to 2,484.15 levels. Analysts stated that the divestment news in the Central Bank of India and Indian Overseas Bank has fuelled the up move in PSU Bank stocks. “Disinvestment news in CBI and IOB lead the rally in PSU Banking basket. Though, the government needs to do some amendments in the current banking rule for disinvestment in both of these banks,” Vishal Wagh, Head of Research, Bonanza Portfolio Ltd, told TheSpuzz Online. Wagh also stated that technically, PSU Bank has currently been outperforming Private Banks and this outperformance may perhaps continue for time becoming.
Central Bank of India shares zoomed 20 per cent to Rs 24.30 apiece on BSE. In traded volume terms, 1.20 crore shares exchanged hands on BSE, even though a total of 7.54 crore scrips exchanged hands on NSE so far in the day. Shares of Indian Overseas Bank had been also locked in 20 per cent upper circuit at Rs 23.60 apiece on BSE, also it is fresh 52-week higher. The shares of Chennai-based bank surpassed its prior higher of 23.45 apiece, touched on June 8, 2021. So far in intraday, a total of 1.12 crore shares of IOB have traded on BSE, and 6.46 crore units at the NSE. Similarly, Jammu & Kashmir Bank shares also jumped 20 per cent to Rs 39.35, also a new 52-week higher, on BSE. A total of 87.39 shares traded on BSE even though a total of 6.52 crore shares exchanged hands on NSE so far.
Analysts stated that the government has shortlisted the Central Bank of India and the Indian Overseas Bank for privatisation. “With news of two PSU banks namely Central Bank of India & Indian Overseas Bank being shortlisted for privatization, PSU stocks have surged in today’s trade,” AR Ramachandran, Co-founder & Trainer, Tips2Trades, told TheSpuzz Online. Ramachandran stated that technically, investors should use this rally to book earnings in these stocks. “Rs 25.9-26 will act as strong resistance for both the Central Bank of India and Indian Overseas Bank. While J&K Bank looks very overbought and profit booking can be done starting from current levels itself,” he stated.
The government has announced privatisation strategy in the Union price range for 2021-22 as a element of the divestment ambitions for FY22.