SBI, ICICI Bank unfazed by Fitch downgrade; settle with gains
Mumbai: Stocks of as many as seven banks, whose credit rating outlook was lowered to negative from stable by global agency Fitch, remained unaffected by the move and settled with gains of up to 1.3 percent Wednesday.
Fitch Wednesday cut credit rating outlook to negative from stable of 11 financial entities, including State Bank of India, ICICI Bank, Punjab National Bank and Axis Bank.
On the BSE, Shares of SBI settled 0.65 percent higher at Rs 2,116.70, while ICICI Bank was up 0.83 percent at Rs 833.30.
PNB gained 0.43 percent and Axis Bank moved up by 0.23 percent. Among others, Bank of Baroda rose by 1.39 percent, Canara Bank was up 0.89 percent and IDBI Bank climbed 1.07 percent.
"Investors are tired of downgrades that is why these stocks did not show any adverse reaction to the Fitch rating outlook," CNI Research Chairman & Managing Director Kishore Ostwal said.
"The outlook revision of the financial institutions reflects their close linkages with the sovereign by virtue of their high exposure to domestic counter-parties and holdings of domestic sovereign debt," Fitch said in a statement.
The list of downgraded entities includes six government banks (including an international banking subsidiary of a government bank), two private banks. These include Bank of Baroda, Bank of Baroda (New Zealand) Ltd (BOBNZ), Canara Bank, and IDBI Bank.
Besides, two wholly-owned government institutions -- Export-Import Bank of India and Housing and Urban Development Corporation Ltd -- have also been similarly downgraded.
The outlook of IDFC Ltd and Indian Railway Finance Corporation Ltd outlook has also been lowered to negative.
Meanwhile in the broader market, the BSE benchmark Sensex ended at 16,896.63, up 36.83 points.