PSU Banks led by Union Bank rally up to 6% as bond yields cool off sharply
Published on 08/04/2026 09:44 AM
PSU Banks led by Union Bank rally up to 6% as bond yields cool off sharplyPSU Banks hold a large portfolio of government securities. Most of these are generally held under Hold-to-Maturity (HTM) format, while a significant chunk is also held under the Available For Sale (AFS) form.By Hormaz Fatakia April 8, 2026, 9:44:23 AM IST (Published)2 Min ReadShares of India's state-run lenders have surged as much as 6% on Wednesday, April 8, following a sharp cool off in India's government bond yields.
The PSU Bank index is trading with gains of 4.5% in early Wednesday trading, led by Union Bank of India and Bank of Maharashtra, which are trading with gains of 5% each, followed by Bank of India, Canara Bank, Bank of Baroda, Indian Bank, PNB and Punjab Sind Bank, which have seen gains of 4% to 5%.
Shares of State Bank of India, India's largest lender, are also trading with gains of up to 4%.
India's 10-year bond yield has cooled off sharply by nearly 15 basis points on Wednesday to 6.91%, in response to a sharp upmove in risk assets triggered by the announcement made by US President Donald Trump of a two-week pause to hostilities in Iran and reach an agreement on various points of contention.
PSU Banks hold a large portfolio of government securities. Most of these are generally held under Hold-to-Maturity (HTM) format, while a significant chunk is also held under the Available For Sale (AFS) form.
According to an IIFL Capital note, a 25 basis points rise in short-term bond yields impacts the profit after tax (PAT) for lenders by 0.1% to 0.7%, while a 50 basis points rise in medium-term bond yields could impact the networth of lenders by 0.3% to 0.6%.
All constituents of the PSU Bank index are trading with gains.Continue ReadingTags10-year bond yieldBank of India BoICanara BankIndian BankNifty PSU BankPNB sharesPSU banksSBI share priceshare market todayUnion Bank share