Stock Market Today: Nifty PSU Bank Surges 1.4% On FDI Buzz
Nifty PSU Bank Index kicked off the week with a strong rally, climbing 1.4% after reports suggested that the government might open the doors wider for foreign investors.
What Is The Buzz About? A potential hike in the foreign direct investment (FDI) limit for state-owned banks, from the current 20% all the way up to 49%.
The news sent PSU banking stocks on a high, with the index touching an intraday peak of 8,118.95. Traders cheered the move, seeing it as a major step toward boosting capital inflows and bringing public sector banks closer to their private counterparts in investor appeal.
Stock Market Today: State-Owned Banks Shine
Most PSU bank stocks were in the green, with Indian Bank, SBI, Bank of Maharashtra, and Union Bank leading the rally. Indian Overseas Bank stood out as the sole laggard.
- Indian Bank – traded in the green
- Bank of Maharashtra – traded in the green
- State Bank of India (SBI) – traded in the green
- Union Bank – traded in the green
- Indian Overseas Bank – the only stock in red
Updates From Government-RBI Discussions Underway
According to a Reuters report, the Finance Ministry has been in talks with the Reserve Bank of India (RBI) for several months on the proposal. The move aims to narrow the gap between ownership rules for public and private banks, where foreign investors can hold up to 74% in private lenders.
Rising Global Interest in Indian Banks
- Foreign investor appetite for India’s banking sector is growing steadily.
- Emirates NBD of Dubai acquired a 60% stake in RBL Bank for $3 billion.
- Sumitomo Mitsui Banking Corp invested $1.6 billion for a 20% stake in Yes Bank, later upping it by 4.99%.
- State-owned banks are also gaining attention from global investors.
- A potential hike in FDI limits could bring in more capital and strengthen the sector further.