Bank stocks up on govt steps to address NPAs

Mumbai: Shares of banks on Friday went up by about 6 percent after the government said that it is planning to set up a high-level panel to effectively deal with the issue of mounting bad loans.

Shares of State bank of India jumped 2.80 percent to settle for the day at Rs 249.55 on BSE. While, Bank of Baroda edged higher by 5.38 percent to end the day at Rs 179.25.

Punjab National Bank closed the day at Rs 144.30, up 3.29 percent and Canara Bank went up by 3.22 to close at Rs 270.80.

Among others, Syndicate Bank surged by 5.23 percent to close at Rs 94.60, while Union Bank went up 4.96 percent to close at Rs 168.20.

Interestingly, IDBI Bank whose staff has gone on a nationwide strike today closed the day at Rs 86.40 after going up by 4.03 percent.

Taking a cue from the development, private lenders like Axis Bank, ICICI Bank and HDFC Bank also ended the day on a positive note.

Axis Bank closed the day at Rs 470.90, up 1.23 percent, while HDFC Bank went up by 1.34 percent to close at Rs 1078.80. ICICI Bank closed the day at Rs 269.60, up 1.97 percent.

Concerned over mounting bad loans, the government today said that it is planning to set up a high-level panel to effectively deal with the issue.

The gross NPAs of PSBs rose to 6.03 percent at the end of June 2015, as against 5.20 percent in March 2015.

"The government is taking number of steps to address issues like NPAs, which is a big concern. The move has helped the sector to gain today," Geojit BNP Paribas Head-Research Alex Mathews said.

Analysts also attributed the rise in the sector to the overall market, which was up being the first day of December F&O expiry.

"Being the first day of December F&O expiry the markets rose on the back of buying in almost all counters. Also the possibility of passing of major bills in the winter session supported the markets," Mathews said.

In the broader market, the benchmark BSE Sensex jumped 169.57 points to close at 26,128.20, while Nifty climbed 58.90 points to 7,942.70.