New Delhi: Barclays downgrades select state-owned banks and finance companies, citing a slowing economy and unpredictable monetary policy responses.
The brokerage expects asset quality to remain problematic as the stress in economy is seen extending beyond the SME and mid-corporate segments to the large corporate segment.
"We are negative on PSU stocks on concerns that they not only have stressed exposures, but are likely to be constrained in taking risk mitigation actions," Barclays said in a report on Thursday.
The research house downgrades Bank of Baroda Ltd, Bank of India Ltd and Punjab National Bank Ltd to "underweight" from "equal weight".
Bank of Baroda gains 3 percent, while Bank of India is up 4 percent and Punjab National Bank rises 2 percent.
Among non-banking finance companies, LIC Housing Finance Ltd was cut to "equal weight" from "overweight", while Rural Electrification Corporation ltd was downgraded to "underweight" from "equal weight". * LIC Housing is up 2.1 percent, while REC is down 1.1 percent.
First Published: Friday, August 30, 2013, 11:48