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Select PSU banks rally as speculation mounts around higher FDI cap and consolidation
PSU banking stocks rallied on speculation of an FDI-cap hike and consolidation efforts, backed by improving asset quality and credit growth trends.
Shares of several public-sector banks surged as speculation grew around a potential increase in the foreign direct investment cap and impending sector consolidation. Market participants pointed to possible government announcements in the fiscal quarter that could pave the way for larger private-sector participation and improved governance. The rally was broad-based across mid- and large-cap PSU banking names, with volume picking up sharply.
Investors also cited improving credit off-take and declining non-performing assets in recent quarters, making the sector attractive ahead of policy change expectations.