Central Bank of India, Indian Overseas Bank and J&K Bank share prices hit 20 per cent upper circuit in intraday deals on BSE.
Central Bank of India, Indian Overseas Bank and J&K Bank share prices hit 20 per cent upper circuit in intraday deals on BSE. On the back of the rally in these three stocks, Nifty PSU Bank index surged as much as 4.4 per cent to 2,484.15 levels. Analysts said 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 Financial Express Online. Wagh also said that technically, PSU Bank has already been outperforming Private Banks and this outperformance may continue for time being.
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, while a total of 7.54 crore scrips exchanged hands on NSE so far in the day. Shares of Indian Overseas Bank were also locked in 20 per cent upper circuit at Rs 23.60 apiece on BSE, also it’s fresh 52-week high. The shares of Chennai-based bank surpassed its previous high 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 high, on BSE. A total of 87.39 shares traded on BSE while a total of 6.52 crore shares exchanged hands on NSE so far.
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Analysts said 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 Financial Express Online. Ramachandran said that technically, investors must use this rally to book profits 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 said.
The government has announced privatisation plan in the Union budget for 2021-22 as a part of the divestment goals for FY22.