Sector Spotlight: PSU banks poised for upside; stocks to buy are SBI, Bank of Baroda, Canara Bank, says this analyst

Stock to Buy: SBI share is an index heavyweight and will lead the rally for the Nifty PSU bank of index, analyst Nilesh Jain opines. Buying at current levels is recommended. The stock hit a life time high of Rs 549 on the NSE and has corrected significantly from those levels

Nifty PSU Bank index testing levels around 2750, arguing that a base formation has happened in PSU bank stocks and an outperformance is expected from here. Source: Website

Sector Spotlight: Indian stock markets ended in the red on Wednesday registering their second consecutive fall on higher pull-outs by Foreign Institutional Investors (FIIs) and high crude oil prices. The benchmark indices BSE Sensex and Nifty 50 were down over 0.3 per cent at the closing time. While the former ended at 55,381.17, the latter ended at 16522.75.

The FIIs sold equities worth Rs 1930 cr while the Domestic Institutional Investors (DIIs) bought Indian equities worth Rs 984.11 cr.

Out of the 15 sectoral indices, 6 ended in the green while 9 ended negatively. Technical Analyst Nilesh Jan is betting on PSU banks over the positional term. He recommends State Bank of India (SBI), Bank of Baroda (BoB) and Canara Bank for decent returns with June series in view.

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Jain is Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking

He sees Nifty PSU Bank index testing levels around 2750, arguing that a base formation has happened in PSU bank stocks and an outperformance is expected from here.

Today, Nifty PSU Bank index ended at 2,593.55, and was up 0.7 per cent from the Tuesday closing price. In the 12-share index, 8 ended up while the remaining four declined. The biggest gainers were Union Bank of India, Canara Bank and BoB. The stocks were up 2.1 per cent, 1.9 per cent and 1.8 per cent respectively.

The top losers were Punjab & Sind Bank (PSB), Indian Overseas Bank (IOB) and Central Bank of India which were down 1.3 per cent, 1 per cent and 0.5 per cent.

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State Bank of India: Buy | LTP: Rs 469| Target: Rs 500| Stop Loss: Rs 455| Upside 7%

The SBI shares today ended with gains of 0.25 per cent. It is the index heavyweight and will lead the rally for the Nifty PSU bank of index, Jain said. Buying at current levels is recommended. The stock hit a life time high of Rs 549 on the NSE and has corrected significantly from those levels.

The AVP said that SBI stock looks strong on the charts and has been witnessing higher tops and higher bottoms.

BoB: Buy | LTP: Rs 102| Target: Rs 110| Stop Loss: Rs 91| Upside 6-8%

The stock ended with gains of 1.8 per cent on Wednesday. Buying is recommended at current levels. The stock has a strong support at levels around Rs 91, where it has witnessed a double bottom formation. The 52-week high for this stock is Rs 122.

Canara Bank: Buy | LTP: Rs 209| Target: Rs 220| Stop Loss: Rs 200| Upside 6-8%

Jain’s third stock is Canara Bank. The stock ended nearly 2 per cent higher from the last closing price. Buying is recommended at current levels, he added. The charts show an MACD buy crossover

MACD or Moving Average Convergence Divergence is a momentum indicator.

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)

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