Business Today

Why State Bank of India shares fell 3% in intraday trade

In line with benchmark indices, SBI share price declined as much as 2.84 per cent to touch an intraday low of Rs 309.25 apiece on the BSE after opening tad lower at Rs 317.45 against previous close level of Rs 318.30

twitter-logo BusinessToday.In   New Delhi     Last Updated: November 13, 2019  | 17:24 IST
Why State Bank of India shares fell 3% in intraday trade
Since October 25, the SBI shares have rallied 13 per cent after the country's largest lender reported strong earnings for Q2FY20

State Bank of India (SBI) shares declined nearly 3 per cent in intraday trade on the Bombay Stock Exchange (BSE) on Wednesday in line with the benchmark indices. On Friday, global rating agency Moody's Investors Service lowered its view on SBI to 'negative' from 'stable'.

The rating agency had also downgraded the outlook of state-owned financial institutions such as Export-Import Bank of India, Housing and Urban Development Corp Ltd (HUDCO), and Indian Railway Finance Corporation Limited (IRFC) to negative.

The rating action came after Moody's cut India's credit rating outlook to negative- the first step towards a downgrade, saying the government has not taken necessary steps to address economic weakness, leading to rising risks that growth will remain lower.

Also Read: Why YES Bank shares fell nearly 4% in intraday trade

"The close links between the companies and the Government of India is the key reason why Moody's has changed the outlooks for these companies to negative from stable, after doing the same for the sovereign rating," Moody's had said in its report.

Also Read: Moody's downgrades Infosys, TCS, SBI, HDFC Bank, other firms

In line with benchmark indices, SBI share price fell as much as 2.84 per cent to touch an intraday low of Rs 309.25 apiece on the BSE after opening tad lower at Rs 317.45 against previous close level of Rs 318.30. Meanwhile, the BSE Sensex was trading at 40,285.68, down 0.15 per cent.

In a similar fashion, SBI shares were trading 2.70 per cent lower at Rs 309.65 per cent on the National Stock Exchange (NSE). The scrip hit an intraday low of Rs 309.20 against previous closing price of Rs 318.25.

Also Read: SBI Q2 profit jumps three-fold to Rs 3,012 crore on higher net interest income

Since October 25, the SBI shares have rallied 13 per cent after the country's largest lender reported strong earnings for the second quarter ended September 30, 2019. The bank reported over three-fold year-on-year jump in September quarter profit at Rs 3,011.73 crore, helped by higher net interest income and improvement in asset quality. The bank's asset quality also improved during September quarter with gross non-performing assets (NPAs) ratio declining to 7.19 per cent versus 9.95 per cent in the previous year. Net NPA also fell to 2.79 per cent as compared to 4.84 per cent in the corresponding period last year.

As per media report, the state-owned lender plans to raise around Rs 8,000 crore by selling a minority stake in SBI Cards, a joint venture where SBI owns 74 per cent. The company has initiated the process to offload 14 per cent stake in SBI Cards through the public issue, valuing the company at Rs 57,000 crore, the Economic Times reported.

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close