PSU Bank Shares Plunge 8% Post-Budget: High Government Borrowing Blamed
Business
M
Moneycontrol•01-02-2026, 18:22
PSU Bank Shares Plunge 8% Post-Budget: High Government Borrowing Blamed
- •Public sector bank shares fell up to 8% after the Union Budget 2026 presentation by Finance Minister Nirmala Sitharaman.
- •The Nifty PSU Bank Index slumped 5.5% on February 1, with all 12 constituent shares trading in the red.
- •Bank of India saw the largest fall at 8.6%, followed by Indian Bank with a 7.6% decline.
- •The primary reason for the fall is the government's record borrowing of ₹17.2 lakh crore from the market for FY27, exceeding expectations.
- •Increased government borrowing is expected to raise bond yields, leading to treasury losses in PSU banks' mark-to-market portfolios.
Why It Matters: PSU bank shares dropped significantly post-budget due to higher-than-expected government market borrowing.
✦
More like this
Loading more articles...
