During the day, the Nifty PSU Bank index jumped 5% on the NSE on Friday. All PSU banks in the index were trading above 3.5%. Union Bank, Punjab and Sind Bank, UCO Bank and Indian Bank were trading over 6% higher. Fading impact of Hindenburg report on Adani shares and global recovery also contributed to the outperforming Nifty PSU Bank.
Union Bank shares rose 7 percent Punjab and Sind Bank stock was trading at 71.55 with a gain of 6.81%. 28.25 on the NSE on Friday’s intra-day trade. UCO Bank was up 6.36% 27.60 and Indian Bank Shares were up 5.70% 290.15. Nifty PSU continued to perform well after hitting a one month low on February 24.
Experts say that the stock market is witnessing a sharp rally led by banking sector stocks. Investors are experiencing some degree of optimism in the stock markets amid recovery in global markets and relief in the Adani case.
Adani Group shares did well on Friday after receiving its first major investment of $1.87 billion GQG Partners Inc. Post Hindenburg Report Release. Florida-based firm bought 3.4% stake Adani Enterprises Ltd. for approximately $662 million, 4.1% of Adani Ports and Special Economic Zones Ltd., 2.5% for $640 million Adani Transmission Ltd. for $230 million, and 3.5% Adani Green Energy Ltd. for $340 million, reported Reuters.
Adani Enterprises Ltd was trading higher by 13.89% 1829.90 on the BSE in Friday’s intra-day trade. At the same time, shares of Adani Ports and Special Economic Zone were trading up 8.87%. At 678.50, Adani Transmission Ltd. was up 5%. 743.75, and Adani Greens Energy Ltd. was up 5%. 562.
Parth Nayati, Founder, TradingO believes that the relief in the Adani case has changed the mood of the market and triggered a significant short-covering move.
Read also: Adani refutes reports of getting $3 billion from sovereign wealth fund
“India VIX was near a multi-month low, hence, despite the highly oversold condition of the market, there was no panic. There are signs that the market has established a base and is ready for an increase, but US bond yield signals will be important. Technically, the 20-DMA of 17700 will be a major hurdle for Nifty; On top of this, we can expect some meaningful strength in the market,” said Parth.
He believes that the PSU banking sector and all PSU stocks are considered strong because of their fundamental strength.
“PSU banks will continue to do well as they are fundamentally in a healthier state and the outlook is still positive. In terms of Nifty PSE index, it is set for a multi-year breakout, and if it happens, we can expect a significant outperformance in the PSU sector over the next few months.”
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