March turns brutal as PSU banks plunge up to 20% amid war-led selloff; UCO, BoB punished most

Core Viewpoint - The PSU banking sector has faced significant declines due to the ongoing Iran-Israel conflict, resulting in a nearly 16% drop in the index over the past month, with no stocks delivering positive returns [2][6][7]. Group 1: Market Performance - All 12 stocks in the PSU bank index were trading in the red, with Punjab National Bank (PNB) falling nearly 5% to a session low of Rs 105.01 [1][7]. - Other notable losers included Bank of Baroda (BoB), Canara Bank, Punjab & Sind Bank (PSB), and UCO Bank, each declining by over 4% [1][7]. - The broader Nifty index dropped 400 points or 1.7% intraday, while the BSE Sensex fell 1,650 points to a low of 73,621.17 [5][8]. Group 2: Economic Impact - The all-India market capitalization of BSE-listed companies decreased by Rs 8 lakh crore, falling from Rs 431 lakh crore to Rs 423 lakh crore [5][8]. - The PSU bank index has seen stocks plunge up to 20% during the conflict, with UCO Bank being the biggest laggard at -20% [2][7]. Group 3: External Factors - A record-low rupee, now at 94.79 per dollar, has contributed to the negative sentiment, having declined about 3.5% since the war began [6][8]. - The ongoing Iran-US conflict has created uncertainty, with US President Trump postponing an attack on Iran's energy facilities, which did not positively impact market sentiment [6][7].