PSU banks slide up to 5% amid war-led selloff; UCO, BoB, punished most
Why it matters: Geopolitical tensions and a weakening rupee are punishing PSU bank investors, signaling broader market instability.
- All 12 PSU bank stocks traded in the red, with Punjab National Bank (PNB), Bank of Baroda (BoB), and UCO Bank being the hardest hit, each declining over 4% intraday and up to 20% over the past month.
- The broader Nifty plunged 400 points and the BSE Sensex tanked 1,650 points, wiping out Rs 8 lakh crore from market capitalization, as investors booked profits after a brief two-day rally.
- The Indian Rupee (INR) fell to a historic low of 94.79 per dollar, declining about 3.5% since the war began, further weighing on market sentiment.
- US President Donald Trump's announcement to postpone an attack on Iran's energy facilities and his positive remarks about talks did not impress markets, as an Iranian official described the US proposal as "one-sided and unfair," indicating ongoing geopolitical tension.
Indian PSU banks experienced a significant selloff, with the index plummeting nearly 16% over the past month due to war-related market jitters and a record-low rupee. This decline, which saw individual stocks like UCO Bank and Bank of Baroda fall up to 20%, was exacerbated by fading hopes of de-escalation in the Iran-US conflict, despite President Trump's claims of positive talks.
