The stock ended at Rs 553.45, up 6.93 per cent from its previous close on the NSE.
Shares of the country's second-largest public sector bank by assets rose 5.94 per cent to Rs 548.60 at the close on the BSE, after climbing as much as 7 per cent to Rs 554.20.
The bank's net non-performing assets (NPA) declined to 2.8 per cent of advances in the December quarter from 3.07 per cent in the September quarter of this financial year. Gross NPAs came down to 4.96 per cent from 5.14 per cent in the September quarter.
Punjab National Bank today posted a 42.1 per cent dip in net profit to Rs 755 crore in the third quarter ended December from Rs 1,306 crore a year earlier due to higher provisioning for bad loans.
"PNB's profit came in lower than expected. However, improvement in assets quality, coupled with recent sharp correction in stock price, made it attractive bet for traders and investors," said Milan Bavishi, Head Research, Inventure Growth and Securities.
Echoing similar views, Vaibhav Agrawal, VP Research Banking at Angel Broking, said: "PNB reported improvement in asset quality numbers during the quarter."
However, gross NPAs were higher than the level of 4.61 per cent a year earlier and net NPAs went up from 2.56 per cent at the end of December 2012.
Total income increased to Rs 11,922 crore for the quarter ended December from Rs 11,499 crore in the same quarter of the previous financial year.