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Public sector bank stocks (PSBs) gained ground on Friday after JP Morgan suggested that it will include India in its Emerging Market Bond Index starting June 2024.
The rally in PSBs, analysts feel, was more a knee-jerk reaction to the development, and the actual benefits will start to accrue once the addition takes place in 2024.
"The actual benefit for banks from the inclusion in JP Morgan's EM Index will accrue from June 2024 onwards. Until then, the larger fundamentals of the market will dictate the moves. Once the initial euphoria subsides, bond markets will look to global cues which may trigger fresh selling," said Siddharth Khemka, head of retail research, Motilal Oswal Financial Services.
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