PSU Bank Stocks Surge Up to 5% Amid Market Rebound

Nifty PSU Bank Index Rises 4% on Friday, March 20

The Nifty PSU Bank index surged almost 4% in intra-day deals on Friday, March 20, following broader gains on Dalal Street. This comes after a steep 3% fall in the previous session.

Market Benchmarks Rise

The Nifty and Sensex also rose on Friday, March 20, tracking gains in Asian markets and aided by short-covering after sharp losses in the previous session. Sentiment improved as crude oil prices eased and the US dollar softened, offering relief to investors.

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Optimism Boosted by Geopolitical Signals

Optimism was further supported by geopolitical signals, with Israeli Prime Minister Benjamin Netanyahu indicating that Israel would avoid targeting energy infrastructure and suggesting the conflict could end sooner than expected. Meanwhile, US President Donald Trump ruled out deploying ground troops, saying he is not putting troops anywhere, easing fears of further escalation.

PSU Banks Perform Well

All constituents of the Nifty PSU Bank index were trading in the green. Canara Bank surged the most, up almost 5% followed by Union Bank of India, Maharashtra Bank, and Indian Bank rallying over 4% each. Meanwhile, Bank of India, Punjab National Bank, Bank of Baroda, State Bank of India, Indian Overseas Bank, and UCO Bank also added between 3-4% each. Punjab and Sind Bank and Central Bank of India were also up over 2% each.

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Brokerage Firm Turns Positive on PSU Banks

Brokerage firm Antique Stock Broking turned positive on PSU banks such as Punjab National Bank and Canara Bank after the recent correction, citing valuation comfort and historical recovery trends. PSU banks have risen around 11% since February 28, compared to a 7% decline in private banks, reflecting a familiar pattern seen during past global shocks.

Targets Set for PSU Banks

Antique has set targets of ₹140 for PNB, ₹165 for Canara Bank, ₹225 for Union Bank, and ₹1,210 for SBI. Separately, Emkay Global Financial Services highlighted that PSU banks have historically corrected more than private peers during major geopolitical shocks, but have also reversed losses in each of these periods, even higher than their private peers.