Stocks to buy today: Nifty PSU Bank index hits life-time high. Experts pick SBI, BoB, PNB, Canara Bank shares

According to stock market experts, Dalal Street leaders like Reliance, Infosys, TCS, Wipro, HCL Tech, etc. are under sell off stress and they are expected to remain sideways to weak in near term due to lower than expected Q1 results 2023. Hence, positional investors are looking at safer bets and PSU bank stocks are emerging as preferred chopice for them as they are expected to deliver better quarterly numbers on QoQ and YoY. They said that stocks listed at Nifty PSU Bank index may continue to outperform Reliance, TCS, Infosys, Wipro and other market leaders in near term and advised medium to long term investors to look at PSU stocks like SBI, Bank of Baroda, Canara Bank and Punjab National Bank (PNB).

Why PSU bank stocks are skyrocketing — explained

Speaking on Nifty PSU bank index chart pattern, Sumeet Bagadia, Executive Director at Choice Broking said, “The index has given breakout at 4,525 levels and it may become highly bullish after breaching the hurdle placed at 4,639 mark. On breaching this resistance on closing basis, we can expect Nifty PSU Bank index to go up to 4,750 and 5,000 levels in near term.”

Listing out top five reasons that have fueled Nifty PSU Bank index to record high, Vaibhav Kaushik, Research Analyst at GCL Broking said, “Nifty PSU Banks are surging these days due to the following five reasons — high interest rate regime, high demand in Indian economy, signs of peaking out inflation, strong Q1 results expectations and Government of India’s bad loan initiative.”

GCL Broking expert said that due to high interest regime for last few quarters, Indian banks including PSU banks have managed to report improvement in their margins. As these PSU banks are trading at very low PE, which makes them an attractive bet for positional investors.

On why Nifty PSU Bank index climbed to a new peak today, Anuj Gupta, Vice President — Research at IIFL Securities said, “Amid weakness in market leaders like Reliance and leading IT stocks, investors are moving towards PSU bank stocks as these banks are expected to deliver better numbers on both QoQ and YoY basis. So, PSU and private bank stocks have emerged a safe bet for investors when most of the Indian indices are in overbought condition.”

Anuj Gupta of IIFL Securities said that GoI’s bad loan initiative has helped PSU banks to come out of the cash crisis at a faster rate and now they are able to compete with the private lenders like ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank, etc. But, small PSU banks will take time to give competition to these large private lenders. So, those who want to buy PSU bank shares, they should look at big PSU bank shares like SBI, Canara Bank, etc.

Stocks to buy today

On which PSU bank stock to buy in current market scenario, Vaibhav Kaushik of GCL Broking said, “In big ticket size, State Bank of India (SBI) shares are most safe bet for long term investors. In small ticket size, positional investors can look at Bank of Baroda and Punjab National Bank (PNB) shares, if they have medium to long term time horizon.”

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

Updated: 24 Jul 2023, 11:42 AM IST