UCO Bank, Bank Of Baroda, Other PSU Bank Stocks Rally As RBI Boosts Liquidity
Nifty PSU Bank outperformed the Nifty 50 on Thursday, rising by 0.74% compared to the benchmark's marginal gain of 0.13%. This rally in PSU Bank stocks followed the Reserve Bank of India's announcement of enhanced liquidity measures.
Leading the gains were UCO Bank, which surged by 2.83% trading at Rs 37.80, followed by Bank of Baroda with a 2.51% increase to trade at Rs 210.38, and Punjab and Sind Bank stock, which rose by 2.71% to bring its scrip price at Rs 41.58 apiece.
Indian Overseas Bank and Punjab National Bank also saw gains, climbing by 2.55% and 2.52%, respectively. The largest PSU Bank of the nation, State Bank Of India's scrip was trading 0.88% higher at Rs 736.75.
The RBI announced that it would inject additional liquidity into the banking system through open market operation purchase auctions and long-tenure dollar-rupee buy/sell swaps. Specifically, the RBI will conduct OMO purchases of government securities worth Rs 1 lakh crore in two tranches of Rs 50,000 crore each. The first auction is scheduled for March 12, with the second to follow by March 18.
Additionally, the central bank has decided to hold a dollar-rupee buy/sell swap auction of $10 billion for a period of 36 months on March 24. This marks the second largest auction by the RBI in recent times, following a similar $10 billion swap auction conducted on Feb. 28.
The RBI will continue to monitor evolving liquidity and market conditions and take appropriate measures to ensure orderly liquidity conditions, it said.
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