State Bank of India share gains 5% despite Moody's downgrade

Share price of State Bank of India rose 5.67% intraday on Wednesday despite negative revision of the lender's ratings by Moody's Investor Service. Moody's has downgraded the long-term local and foreign currency deposit ratings of the state-owned lender to Baa3 from Baa2,  citing economic disruption caused by coronavirus outbreak.

Moody's has placed its ba1 BCA under a review for downgrade as it expects SBI's asset quality and profitability to weaken, which could hurt its capitalisation.

SBI stock touched the intraday high of Rs 179.9, rising 5.67% on BSE. SBI share currently trades higher than its 5 and 20-day moving averages but lower than 50, 100 and 200-day moving averages. The share closed 2.70% higher at Rs 174.85 on BSE.

The stock has logged 10% returns in the last 4 days. SBI share price has gained 9.84% in one week.

Market capitalisation of the lender stood at Rs 1.56 lakh crore today.

"Economic disruption caused by the coronavirus outbreak and the downgrade of the sovereign rating are the key drivers for today's rating actions," Moody's said.

The other ten banks on which the brokerage took rating action included HDFC Bank, IndusInd Bank, Bank of Baroda, Punjab National Bank, Union Bank of India, Canara Bank, Bank of India, Central Bank of India, Indian Overseas Bank and EXIM Bank.

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