IndusInd Bank, SBI tumble as Moody's downgrades sector outlook to negative

Banking and non-bank finance companies (NBFCs), including IndusInd Bank, ICICI Bank, and State Bank of India (SBI), came under heavy selling pressure on Friday after global brokerage Moody's Investors Service changed the outlook for the banking system to negative from stable, as it expects a deterioration in banks' asset quality due to disruption in economic activity from the coronavirus outbreak.

Stating that asset quality will deteriorate, Moody's said a sharp decline in economic activity and a rise in unemployment will lead to a deterioration of household and corporate finances, which in turn will result in increases in delinquencies.

"Growing solvency stress among