PSU bank stocks fell again on Monday, extending a four‑day losing streak and leaving investors wondering what comes next.
Why the shares fell
The Nifty PSU Bank index slipped 0.3% to 8,263.55 as most public‑sector banks saw their prices drop about 1%. The fall follows a recent rally that pushed valuations higher, and analysts say the market is now consolidating.
Analysts’ short‑term outlook
Experts expect more short‑term volatility. Siddharth Maurya notes that while banks have improved asset quality and capital strength, the recent price gains are being pared back. He adds that future moves will depend on each bank’s earnings and any policy signals.
Pravesh Gour points out that PSU banks have become leaders in 2025 because of better fundamentals, lower non‑performing assets, and strong loan demand from infrastructure and retail borrowers. However, he warns that much of the valuation boost may already be priced in, so returns could level off.
Top losers on the day
- Central Bank of India – down >1% to ₹36.47
- Union Bank of India – down ~1%
- Punjab National Bank (PNB) – down ~1%
- Punjab & Sind Bank – down ~1%
- Bank of India – down ~1%
- UCO Bank – down ~1%
State Bank of India, Indian Bank, Indian Overseas Bank and Bank of Baroda also closed in the red, while Canara Bank and Bank of Maharashtra managed small gains.
What investors can consider
- Focus on banks that show steady earnings growth and strong capital buffers.
- Watch for any policy announcements that could affect credit demand.
- Be selective – the sector offers a mix of value and growth, but expectations must stay realistic.
Takeaway
PSU banks are in a transition phase. While the longer‑term story remains positive, the near‑term could be choppy. Retail investors should stay cautious, pick the strongest banks, and keep an eye on earnings and policy cues.
Remember, this is just an overview, not a prediction. Do your own research before making any investment decisions.