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Moody down rating of SBI triggers panic selling in Indian markets

October 4th, 2011

The Indian markets that opened this morning witnessed a flattish session till noon when news that Moodys has downgraded State Bank of India from C- to D+ has come out. This triggered has led to selling pressure in SBI stock and few other banking stocks, such as ICICI Bank. The fire got fuel when European markets too opened in the red and hence spread to the whole of the market. Heavy selling is witnessed across the board making almost all indices to end deep in the red.

The SENSEX closed the day at 15864.86 losing 286.59 points in trading session today. i.e it is down 1.77%. NSE NIFTY last traded at 4772.15 points losing 77.35 or 1.60%. Selling pressure appeared even in the Mid cap and small cap sectors. CNX Midcap closed at 6876.80 down 84.40 points or 1.21% while the BSE Smallcap closed at 6704.93 points down 74.23 or 1.09%). The CNX PSU Bank Index is down 2.94% while CNX Service and CNX Auto indices closed down over 2%.

The Bank Nifty closed at 8913.35 losing 275.55 points or 2.7%. SBI stock closed at sub-1800 levels once again. The script closed at Rs. 1787.20 losing Rs. 74.40 or 4% amidst volumes 5.06m shares traded. ICICI Bank is down 4.43% and has now come to affordable levels of Rs. 801.95. IDBI is down 3.95%. Oriental Bank of Commerce, Axis Bank, Canara Bank, Union Bank and HDFC Bank have lost over 2% each.

Top losers of the day are ICICI Bank, Tata Motors and Mah and Mah (each down over 4%), SBI, Jindal Steel and Sterlite Ind (each down over 3%), Axis Bank, Bharti Airtel, HUL, Jaiprakash Asso, HDFC, HCL Tech, Reliance and Sun Pharma (each down over 2%). On a day of heavy selling, few scripts managed to close in the green. With the strike over, interest both in investor and trading community is back in Maruti Suzuki. The script closed at Rs. 1107.85 up 2.79% today. Larsen that saw selling yesterday managed to close in the green today. L&T is up Rs. 19.50 at Rs. 1338.70. Other gainers of the day include Wipro (up 1%), Rel Capital, BHEL, Hindalco, Tata Steel, Ranbaxy Labs, Siemens, Reliance Power, TCS, Grasim and Hero Motocorp (all marginally up).

Nomura has reiterated their BUY call on Coal India in the report dated September 30, 2011. They feel that recent price correction in the stock is unwarranted because it is very much expected. They has put a target of Rs. 433 for the stock.

Entry Filed under: Equity Markets, Banks & NBFC, Closing Bell, Metal