PSU bank stocks tumble up to 10% as early counting trends lower than exit poll predictions

Shares of Central Bank tumbled 9.5% to Rs 65.4, while Union Bank of India saw a 9.4% decline. Canara Bank, Punjab National Bank (PNB), Indian Bank, and Bank of India also fell over 6% each. India’s largest PSU bank, SBI, dropped nearly 6%. Meanwhile, Indian Overseas Bank, UCO Bank, and Bank of Maharashtra fell 4-5%.

As per early data till 10:10 am, the BJP-led NDA was ahead in 297 seats out of 543 seats, while the INDIA alliance was leading in 216 seats, with others leading in 30 seats. This contrasts with earlier exit poll surveys, which, after the 7th phase of elections on Saturday, indicated a likely BJP victory with the NDA securing over 370 seats.

Earlier last week, Motilal Oswal remained overweight on financials and PSU banks, favouring ICICI Bank and SBI.

Meanwhile, Sanjiv Bhasin, Director of IIFL Securities, expressed bullishness on HDFC, ICICI, Axis, and Kotak, highlighting RBL as a potential outperformer. He noted that private large-cap banks should perform well for the rest of the year, maintaining an overweight stance on these banks.Last week, CLSA identified SBI, Canara Bank, and Bank of Baroda among its list of 54 “Modi stocks,” referring to companies or sectors benefiting directly from government policies under Prime Minister Narendra Modi.During Modi 2.0 (from June 2019 to May 2024), 10 out of 12 PSU bank stocks delivered multibagger returns of up to 473%. According to Ace Equity data, Indian Overseas Bank was the top performer among PSU banks, delivering 473% returns during the Modi 2.0 tenure. Bank of Maharashtra and UCO Bank followed with returns of 325% and 226%, respectively. Central Bank of India, State Bank of India (SBI), Indian Bank, Canara Bank, Punjab & Sind Bank, Union Bank of India, and Bank of Baroda provided returns ranging from 106% to 150% over the last five years.(Disclaimer: The views expressed by experts are their own and do not necessarily reflect those of The Economic Times)