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Broken bank stocks have rebounded sharply over the last two weeks, due to unfortunate earnings surprises and hopes of reversing the bad loan cycle.
Monday, the Nifty PSU Bank Index a gauge for the performance of state-owned bank shares, jumped 4.3 percent, extending its two-week gain to 20 percent hundred.
Most public sector bank stocks recovered, supported by a sharp rise in Bank of Baroda's profits in June. Bank of Baroda (BoB) shares rose 10.4%, followed by the State Bank of India (3.4%) and Punjab National Bank (4.4%).
"BoB recorded an impressive first quarter with improved badet quality and a stable core … We expect growth momentum with quality to gain ground. Anticipating the recognition of stress, we believe that the bank's profits will accelerate.We expect the stock to be re-evaluated as visibility on the distribution profits will improve, "notes Edelweiss.
Nifty Bank gained 0.75%, with shares of ICICI Bank up 4.9% and Axis Bank adding 2.85%. HDFC Bank and Kotak Mahindra Bank lost 1.7% and 0.5% respectively. ICICI Bank shares rallied after badysts revised upward their price target on the hope of a clear improvement in return on equity.
Tags bank Baroda earnings Increases index jump Nifty PNB PSU SBI shares
