The Indian stock market is trading on a cautious note despite the PSU bank index surging over 6 percent intraday on February 17. Sensex is down 143.73 points or 0.28 percent at 51960.44, and the Nifty shed 32.20 points or 0.21 percent at 15281.30.
Among the sectors, the PSU Bank index surged over 6 percent hiiting fresh high of 2457.90 after the government shortlisted four mid-sized state-run banks for privatisation, under a new push to sell state assets and shore up government revenues, three government sources said.
The four banks on the shortlist are Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India, two officials told Reuters on condition of anonymity as the matter is not yet public.
The government hopes that the Reserve Bank of India, the country’s banking regulator, will soon ease lending restrictions on Indian Overseas Bank after an improvement in the lender’s finances that could help its sale.
Share price of Bank of Maharashtra, Indian Overseas Bank and Bank of India zoomed 20 percent while that of Central Bank of India, UCO Bank, Union Bank of India, Indian Bank and Punjab National Bank were the other gainers.
On the other hand, the sectors that dragged included the IT and pharma space. Among the IT names, Wipro was down over a percent while TCS, Tech Mahindra, HCL Tech and Coforge were the top losers.
Selective pharma names are trading in the red. Dr Reddy’s Labs along with Lupin were down over 2 percent despite Lupin launching Posaconazole delayed-release tablets on the United States Food and Drug Administration (USFDA) approval. Dr Reddy’s launched Capecitabine tablets, USP in the US market.
217 stocks have hit a new 52-week high on BSE including names like Bank of Maharashtra, Indian Overseas Bank, Bank of India, Dr Lal Pathlabs, Adani Gas, Sterlite Tech, Indian Bank, IDFC First Bank, Adani Transmission, Adani Ports, Avenue Supermarts, Power Grid, Tata Consumer and Hindalco Industries among others.
To ride the growth momentum, thanks to CAPEX proposals laid down by the government in Budget 2021, experts advise investors to look at the small & midcaps which are linked with economy-related sectors and consumption.
“We see three drivers for small and midcap stocks. First is the possibility that higher government expenditure due to a more relaxed glide path will allow the Indian economy to heal faster. Mid & small-cap cap stocks are more aligned to the domestic economy and the recovery thereof,” said Edelweiss in its report.
“While largecaps may outperform mid and small-caps in the near term we believe that in the longer run broader markets will outperform the benchmark Nifty and the Sensex,” said Jyoti Roy, DVP Equity Strategist, Angel Broking.
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