BSE PSU index sinks 4%. Is the party over for these stocks?
SJVN emerging as the top loser with a nearly 19% drop due to its lacklustre performance in Q3. Following closely are NBCC (India), HUDCO, Mishra Dhatu Nigam, NHPC, Indian Overseas Bank, The New India Assurance Company, Engineers India, KIOCL, NLC India, General Insurance Corporation of India, and Punjab & Sind Bank, all experiencing drops of over 6%. Additionally, railway PSU stocks, which have been significant wealth creators, are also witnessing a decline in today's session due to the underperformance in the December quarter.
Shares of Rail Vikas Nigam, Indian Railway Finance Corporation, RailTel Corporation of India, Ircon International, and IRCTC are all trading lower, with declines ranging between 3% and 10% as of noon. Banking stocks continued their weak performance following the RBI's sixth monetary policy meeting, in which the central bank decided to maintain the repo rate at 6.5% for the sixth consecutive time. Furthermore, the absence of cues from the RBI regarding future rate cuts is also impacting banking stocks.
Additionally, there are no imminent market triggers, as events such as the interim budget and the MPC meeting have concluded. At the same time, rate cuts from the US Fed have been further postponed against market expectations, which led investors to book profit in these stocks. Over the past year, PSU stocks have gained favor on Dalal Street, demonstrating a significant rally, with many of them yielding multibagger returns.
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