On February 12, both the Sensex and Nifty indices faced a setback, declining by 0.7 percent each, attributed to the weakness in PSU banking stocks.
Analysts anticipate a prolonged period of market consolidation, citing stretched valuations and the conclusion of the earnings season as contributing factors.
During the trading session, the Nifty PSU Bank index emerged as the worst performer, witnessing a decline of over 4 percent, with Central Bank, Maharashtra Bank, UCO Bank, and Indian Overseas Bank leading the losses.
According to Vinod Nair, Head of Research at Geojit Financial Services, investors are cashing out profits from PSU banking stocks due to overvalued price-to-book (PB) ratios.
While the Nifty IT and Pharma indices managed marginal gains, other sectors plunged, with Nifty Media and PSU Bank indices experiencing significant declines of over 4 percent each.
Moreover, broader market indices, including Nifty Midcap 100 and Nifty Smallcap 100, witnessed declines of 2 percent and 4 percent, respectively, signaling heightened volatility as India VIX surged over 5 percent to trade above the 16 level.
As the market navigates through consolidation, analysts advise cautious investment strategies, emphasizing the importance of seeking advice from certified experts before making any investment decisions.
