Shares of PSU stocks dropped by up to 13% as RBI imposed stricter regulations on project loans during the construction phase, with provisions set at 5%. Power financing companies like PFC and REC witnessed sharp declines.
Analysts believe that adequate allocation towards roads, railways, highways, and defence would continue, thereby, benefitting related-stocks in the sector
Read more about Financials under pressure; ICICI Bank, RBL Bank, IndusInd slip up to 7% on Business Standard. The first fortnight of April 2021 has been weak in terms of business (already down 20 per cent) due to lower working days and onset of an aggressive second wave of Covid-19 infections
Public sector banks were ruling higher for the second day in a row as investor sentiment remained buoyant amid privatisation buzz. The Nifty PSU Bank index defied market gravity and surged 5.6 per cent to hit an intra-day high of 2,446 on the National Stock Exchange (NSE) as against a 0.6 per cent drop in the Nifty50 index. On Tuesday, a Reuters report suggested that the government has shortlisted four mid-sized state-run banks Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India for privatisation. Two of those banks will be selected for sale in the FY22 which begins in April. The government, however, will continue to hold a majority stake in India s largest lender State Bank of India, which is seen as a strategic bank for implementing initiatives such as expanding rural credit, the report said.