SBI plunges 7%, logs biggest one-day fall in 4 years

Public lender the State Bank of India (SBI) logged its biggest single-day fall in over four years on Wednesday after Morgan Stanley downgraded the stock to equal-weight. A market-wide profit booking also weighed on the bank.

The stock tumbled 7.37 per cent or Rs 22.30 to close at Rs 280.15 on BSE. On August 24, 2015, the stock had plummeted over 8 per cent.

Morgan Stanley downgraded the stock to equal-weight from overweight with target at Rs 330 per share. The global brokerage has, however, raised FY21 and FY22 EPS estimates by 5 per cent each. It said that the recent corporate tax rate cut outweighs lower margins.


State Bank of India has also approached the Securities and Exchange Board of India, 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 Corporation.

The fall in SBI was not limited to the lender as the whole banking sector crashed on Wednesday. Nifty Bank slid 2 per cent dragged down by Bank of Baroda (down 6 per cent), YES Bank (5 per cent), PNB and RBL Bank (4 per cent).

In the two-day rally after the corporate rate cut, the banking index had surged 3,800 points.