PSU stocks across the defence, railway, and non-banking financial company (NBFC) sectors faced significant declines today, with shares falling by as much as 6%. This downturn occurred even as India’s benchmark indices, Sensex and Nifty, rose, driven by unexpected interest rate cuts from the US Federal Reserve.
Defence Sector Stocks Under Pressure
Many defence sector stocks, including Hindustan Aeronautics Ltd (HAL), experienced sharp drops, with HAL falling by 4.61% to close at Rs 4,232. This contributed to a 1.5% dip in the BSE PSU index, indicating widespread selling driven by concerns over high valuations.
Railway Stocks Experience Losses
The railway sector was also under pressure, with BEML Ltd and Bharat Dynamics Ltd witnessing declines of 4.95% and 5%, respectively. Other notable losses included REC Ltd, which dropped 4% to Rs 523.70, and Power Finance Corporation (PFC), declining by 3.5% to close at Rs 473.80.
Midcap and Small-Cap Stocks Struggle
Midcap and small-cap PSU stocks particularly struggled today, contrasting with the more resilient performance of large-cap stocks. This shift in investor sentiment suggests a preference for more stable and less volatile options in the current market environment.
Investor Focus Shifts to PSU Shares
The decline in PSU shares may reflect a broader trend as investors pivot towards defensive sectors. Large-cap private banks, telecom, consumer goods, IT, and pharmaceuticals are gaining attention as safer bets, offering greater stability amid ongoing market uncertainties.
Today’s market movements highlight a growing concern for PSU shares, particularly in the defence and railway sectors. As investors increasingly focus on stability, the pressure on midcap and small-cap stocks suggests a potential shift in market dynamics.
