Stock prices of public sector banks fell up to 3 per cent on Thursday, after the government announced that it would borrow an additional Rs 50,000 crore this fiscal through dated securities.
“The evolving revenue-spending mix as well as the funding of the deficit has forced the government to turns to the market to raise extra cash to meet the funding shortfall,” Edelweiss said in a report. While the rupee closed at 64.08 to a dollar, up 0.12 per cent from its previous close of 64.16, the bond yield rose sharply to 7.396 per cent from its Wednesday’s close of 7.219 per cent, showed Bloomberg data.
On Thursday’s trade all the public sector bank stocks ended the session on a lower note, except IDBI Bank. However, IDBI Bank closed the session just 0.58 per cent higher at Rs 60.4 on NSE.
The Nifty PSU Bank index was down 1.94 per cent, closing at 3,694.45 points while Nifty Private Bank index closed just 0.08 per cent higher at 14,098.3 points. In the index, Syndicate Bank was the biggest loser, its stock closed the session 2.55 per cent lower at Rs 78.45. Andhra Bank, Canara Bank, PNB, Allahabad Bank, SBI, BoB, OBC, UBI and BoI were among the other losers. FE