India's Nifty PSU Bank Index (.NIFTYPSU) tumbled 1.3% in early trade, extending broader market weakness post-RBI rate cut highs. Heavy selling in State Bank, PNB amid deposit growth concerns and global yield pressures tests key supports, bucking private banks' resilience.
The Nifty PSU Bank Index shed 1.3%, trading around 5,850 after opening flat, dragged by State Bank of India (-1.8%), Punjab National Bank (-2.1%), and Canara Bank (-1.5%). This contrasts Nifty 50's milder 0.37% dip, highlighting sector-specific pressures despite RBI's 25bps repo cut to 5.25% boosting rate transmission hopes.
Profit booking follows 25% YTD gains fueled by strong Q2 credit growth (15% YoY) and falling NPAs. Analysts cite deposit mobilization slowdown (11% vs 14% loans), rising term deposit costs, and US Treasury yield spike curbing FII flows. Private banks like HDFC/ICICI held steady.
Support at 5,800; breach eyes 5,650. RSI signals oversold bounce potential.
Key Highlights
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Index: -1.3% (~5,850); SBI -1.8%, PNB -2.1% lead losses
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Triggers: Deposit crunch, yield rise, profit booking post-25% YTD
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Contrast: Private banks flat; Nifty down milder 0.37%
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Q2 strength: 15% loan growth, improving NIMs
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Technicals: 5,800 support; RSI oversold
Sources: Perplexity Finance