Nifty PSU Bank leads sectoral gains; PNB gains nearly 7%

Nifty PSU Bank in Monday’s session (July 29) emerged as the top sectoral performer as the banking sector is showcasing strong Q1. Last, at the time of writing this copy, the index was up over 3 per cent at 7,490.4.

Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said the market is largely ignoring the good results of banking stocks on fears of potential margin compression due to slow growth in deposits. 

Punjab Housing Finance on Saturday reported Q1 profit at Rs 3,251.3 crore up 2.6 times over the same quarter's net profit of Rs 1,255.4 crore. Provisions at the lender also reduced a substantial 81.9 per cent to Rs 792.1 crore. Also, there was an improvement in asset quality at the lender together with good guidance with the state-run lender.

Earlier last week, Canara Bank also posted 11 per cent year-on-year increase in net profit to Rs 3,925 crore. Also, NII at the lender also increased 9 per cent on-year. Also, asset quality at the lender improved substantially sequentially. At around 10 am, all of the constituents of the index traded in the green with gains of up to over 6 per cent.

Meanwhile, shares of SBI which is slated to release its Q1 earnings on August 3 emerged among the top Nifty gainers in today's session.

Atul Parakh, CEO of Bigul held that the rally in the Nifty PSU Bank index could be attributed to several key factors, such as:
- Emphasis on infrastructure development.
- Improvements in asset quality, leading to enhanced profitability and reduction in non-performing assets (NPAs).
- A favorable interest rate environment.