Cochin Shipyard, NBCC, BEL, NTPC among other PSU stocks rally up to 8%; Nifty CPSE jumps 4%

Cochin Shipyard, NBCC India, Bharat Electronics, NTPC, among other PSU stocks rallied up to 8% on Thursday amid strong buying. The Nifty CPSE index was up 4% with all its constituents trading in the green.

The biggest gainers were Cochin Shipyard and NBCC India shares that rallied more than 8% each, followed by NLC India, BEL and NHPC share price gaining over 6% each.

NTPC, SJVN, Coal India, ONGC, OIL India and Power Corporation of India shares were up in the range of 4-2%.

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In the banking sector, Nifty PSU Bank index also jumped more than 3% led by Indian Overseas Bank, Union Bank of India, Central Bank of India, SBI, Punjab National Bank, among others surging 3-5%.

PSU stocks gained as investor sentiment improved after clarity over political stability after Lok Sabha election results 2024. The National Democratic Alliance (NDA) leaders pledged support for the alliance to form a government for the third term.

Public sector undertakings (PSUs) were among the biggest beneficiaries of the NDA government in the last 10 years. This was also reflected in the prices of PSU stocks as some gave multibagger returns.

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However, with BJP failing short of full majority in the lower house of the parliament, the stock market experienced significant volatility and PSU stocks got hammered after the announcement of election results 2024.

“The sectors most affected by this uncertainty were Public Sector Undertakings (PSUs), defense, energy, and railways. These industries saw the most significant impact as investors recalibrated their expectations and adjusted their portfolios in response to the new political landscape,” said Ravi Singh, SVP - Retail Research Religare Broking Ltd.

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Analysts believe the expensive stocks among the PSU pack, Defence plays and Renewable Energy names could see some under-performance in the near-term till the policy momentum turns clear. 

Meanwhile, the Indian share market rebounded after some clarity over the government formation amid hopes of policy continuity.

The Sensex gained 513.38 points, or 0.69%, to 74,895.62, while the Nifty was up 156.20 points, or 0.69%, at 22,776.55.

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