State Bank of India (SBI) shares slid as much as 7.7% in intraday trade on Wednesday, i.e. 25 September, after Morgan Stanley downgraded the stock to ‘equal-weight’ from ‘overweight’ with target of Rs 330 per share.
At 3:20 pm, shares of SBI were trading at Rs 279.55, down 7.6%, after hitting an intra-day low of Rs 279.40. The Sensex was, meanwhile, down 493.40, or 1.26%, to 38,603.74, while the Nifty was trading lower by 144.35, or 1.25%, at 11,443.85.
The Nifty PSU Bank Index was one of the biggest losers among sectoral indices, down 5.4%, with Jammu and Kashmir Bank being the only gainer in the pack (up 3%). Bank of India was down 6%, Union Bank slid 5.9%, Canara Bank declined 5.6%, Bank of Baroda dropped 5.4%, Punjab National Bank fell 4.4% and Indian Bank slipped 3.7%
Morgan Stanley on Wednesday raised SBI’s earnings per share (EPS) estimates for FY21 and F22 by 5% each, adding that the cut in corporate tax rate outweighs lower margins. But the brokerage firm said upside appears limited in SBI, given the uncertainty on asset quality and net interest margins.
SBI, meanwhile, has also approached market regulator Securities and Exchange Board of India (Sebi), seeking a one-time exception for mutual funds over a rule on segregation of assets so that they could be part of a resolution plan being worked on for Dewan Housing Finance Corp. Ltd.
SBI also informed stock exchanges that the proposed two-day bank strike which was to be held on 26-27 September has now been deferred. SBI branches will, therefore, remain open on the last two days of the week.
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