Indian shares edged up on Tuesday after two sessions of falls, led by IT stocks and private sector banks, but state-run lenders continued to reel under the fallout of a $1.77 billion fraud disclosed by Punjab National Bank (PNB) last week.
PNB shares declined as much as 4.7 percent to their lowest since July 2016 and were headed for a fifth session of slump. They have lost 120 billion rupees ($1.86 billion) in market value since Feb. 12, when the lender disclosed fraudulent transactions at a branch.
“There has been a sense of negativity among market participants (after the fraud) and this has shattered the confidence for PSU banks,” said Saurabh Jain, assistant vice president of research at SMC Global Securities, adding that this was benefiting private sector lenders.
The broader NSE index was up 0.14 percent at 10,392.85 as of 0538 GMT, while the benchmark BSE index was 0.23 percent higher at 33,851.49.
The Nifty IT index rose as much as 1.3 percent.
Portfolio shuffling, together with expectations of stable earnings, is prompting investors to flock in the IT pack, said Jain of SMC Global Securities.
Tata Consultancy Services and Infosys Ltd were the top percentage gainers on the NSE index, up 1.5 percent and 1 percent respectively.
The Nifty PSU bank index dropped for a seventh consecutive session. The index has now erased most of its gains since Oct. 24, when the government first announced its recapitalisation plan for public sector banks. Private sector lenders ICICI Bank Ltd and Axis Bank climbed 1.4 percent each. (Business World)
