BoB, SBI, Canara, Central Bank & other PSB shares rally as PM Modi seen retaining power

Indian equity benchmarks surged to record highs on Monday after exit polls projected a third term for Prime Minister Narendra Modi's government in the recently-concluded general elections 2024. Public sectors bank (PSB) stocks also saw a sharp uptick today with sub-index Nifty PSU Bank hitting an all-time high of 8,053.

Out of the Nifty PSU Bank pack, Bank of Baroda shares witnessed the strongest move. BoB's stock settled 12.08 per cent higher at Rs 296.90 after hitting a record high of Rs 299.70. Central Bank of India's counter moved 11.83 per cent higher to end at Rs 72.30. State Bank of India Ltd (SBI) and Canara Bank gained 9.48 per cent and 9.24 per cent, respectively.

Analysts at brokerage remained continued to remain positive on the PSU banking sector. With that being said, one of them suggested booking some profit at current high levels.

"We've been positive on the banking sector. PSU banks have led from the front in terms of earnings growth and improvement in balance sheets. SBI continues to be our preferred pick from within the PSU bank pack," Siddhartha Khemka, VP - Head of Research (Retail) at Motilal Oswal Financial Services Ltd told Business Today TV.

State-owned companies have already seen a great run and one can consider partial profit booking in the mentioned sectors, said Sunny Agrawal, Deputy Vice-President and Head of Fundamental Equity Research at SBI Securities.

Although, Kotak Institutional Equities said it finds a little value in the current market as most sectors and stocks are overvalued.

"Many narrative and PSU stocks are trading at outlandish multiples and are factoring in optimistic volume and profitability assumptions. A large BJP victory may sustain rich-to-bubble multiples in parts of the market (automobiles, capital goods, PSUs) for longer, but we would be surprised if many of the lofty embedded expectations come to fruition," analysts at Kotak stated.

Meanwhile, the benchmark BSE Sensex index rallied 2,507 points or 3.39 per cent to close at 76,469 today and the broader NSE Nifty pack moved 733 points or 3.25 per cent to finish at 23,264. And, Nifty PSU Bank settled 8.40 per cent higher at 8,006.