Shares of State Bank of India staged a comeback in early trade today after a six-session losing streak, surging by over 3% on the BSE and NSE in tandem with a rally in the broader market.
SBI, which had dipped to a 52-week low level of Rs 1,708.55 on the BSE on October 5, surged by 3.29% to an early high of Rs 1,771.90 on the bourse today.
Shares of SBI were later trading at Rs 1,762.20, up 2.73%, on the BSE at 1110 hours.
The uptrend in the counter was in sync with the rally in the broader market, with the 30-share Sensex up by 467.69 points at 16,260.10 at 1110 hours.
Similar movement was witnessed on the National Stock Exchange as well, where the stock opened on a bullish note and rallied by over 3.45% to a high of Rs 1,777.85. It was later quoted at Rs 1,762.15, up 2.55%, at 1110 hours.
SBI has been losing ground on the bourses over the past six trading sessions. It was badly hammered after global ratings firm Moody's downgraded its rating of SBI's financial strength on October 4.
The state-run bank has lost about Rs 8,000 crore in market capitalisation over the two trading sessions since October 4 and its market valuation stood at Rs 1,08,921 crore at the end of trade on October 5.
Moody's downgraded the rating of SBI's financial strength by one notch to 'D+' due to its low tier-I capital ratio and deteriorating asset quality. Moody's cited a likely rise in the bank's non-performing assets in the near future as one of the reasons for the downgrade.
State Bank of India Chairman Pratip Chaudhuri has asked the government to expeditiously approve the bank's rights issue proposal to help it shore up capital by about Rs 20,000 crore.
The downgrade will make overseas borrowings costlier for the state-owned lender.
