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Financial stocks with more worries lead markets lower

Bank Nifty declined 2.6 per cent to close at 17,278.90.

ET Bureau|
Last Updated: May 23, 2020, 09.57 AM IST
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The Nifty Private Bank index fell 2.8 per cent to 9,421.55, while the Nifty PSU Bank index ended down 0.9 per cent to 1,090.15.
Mumbai: Shares of banks and financial companies slumped on Friday, dragging the benchmark indices lower, after Reserve Bank of India governor Shaktikanta Das announced extension of loan moratorium for all term loan repayments till August 31. The lengthier waiting period for banks to get their money back from borrowers is expected to hit their profitability, said analysts.

Bank Nifty declined 2.6 per cent to close at 17,278.90. The Nifty Private Bank index fell 2.8 per cent to 9,421.55, while the Nifty PSU Bank index ended down 0.9 per cent to 1,090.15.

“Banks are already under pressure from Covid lockdown and they are seeing issues on asset quality also. Now this moratorium extension will be negative although, to some extent, the rate cut will be positive for credit growth and will bring down costs for NBFCs and banks,” said Lalitabh Shrivastawa, deputy VP at Sharekhan.
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Axis Bank ended down 5.2 per cent at 338.60, while Federal Bank, RBL Bank, ICICI Bank, Bandhan Bank. HDFC Bank, and IndusInd Bank ended down 2-4 per cent. India’s largest lender, State Bank of India, ended down 0.6 per cent at 151.10.

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