Stock market crash today: Nifty PSU Bank index dips over 3%; Shares of PNB, BoI, Union Bank dip up to 5%

Stock market crash today: Amid the stock market crash for the second straight session on Monday, the Nifty PSU Index nosedived over 3 percent in the early morning session. All 12 PSU banks listed in the Nifty PSU Bank index were under selling pressure. Bank of India (BoI) shares bleed most while Punjab & Sind Bank (PSB), Punjab National Bank (PNB), Union Bank of India, Bank of Baroda (BoB), and State Bank of India (SBI) were among other major losers. BoI shares lost a maximum of around 5 percent, while UCO Bank lost a minimum of around 1.80 percent.

Stock market experts say PSU Bank shares are sliding due to weak global market sentiments. They said that renewed US recession fear after higher jobless claims in the US on Friday, rising Israel-Hamas tension, and the US-China trade war are dragging global markets, including Dalal Street. They advised a 'buy-on-dips' strategy in quality PSU Bank shares like SBI, BoB, Canara Bank, and Union Bank of India.

Outlook for Nifty PSU Bank Index

Speaking on the Nifty PSU Bank Index, Sumeet Bagadia, Executive Director at Choice Broking, said, "The Nifty PSU Bank index has strong support at 6,400 to 6,500 while the index faces resistance at 7,100. A bullish or bearish trend can be assumed on the breakage of either side. Till then, investors are advised to maintain a buy-on-dips strategy."

Why are PSU Bank shares falling?

Speaking on the sharp fall in the Indian PSU bank shares, Avinash Gorakshkar, Head of Research at Profitmart Securities, said, "Indian PSU Banks are falling due to weak global market sentiments. After the higher US jobless claim data was released, fear of recession has been renewed. The rising Middle East tension and the US-China trade war are doing the rest of the damage. So, in the wake of weak global markets, PSU Bank shares are witnessing profit booking as people are squaring off their long positions in their portfolio stocks. However, one must remember that PSU stocks are still quality stocks, and one can look at stocks like SBI, BoB, Union Bank of India, and Canara Bank as they are still available at a PE multiple of below or around 10."

PSU Bank stocks to buy today

Batting in favour of SBI and BoB shares, Sumeet Bagadia said, “In the wake of the stock market crash, I suggest buying SBI shares at around ₹790 to ₹800 apiece for the short-term target of ₹860 and ₹900. However, one must maintain a strict stop loss at ₹760 while taking any fresh buying position in SBI shares.”

"Bank of Baroda shares can be bought or accumulated in ₹230 to ₹220 apiece range maintaining stop loss at ₹210 per share mark. On trend reversal, we can expect the PSU bank stock to touch ₹270 to ₹280 per share target in the short term," Bagadia added.

Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.