Nifty Financial Services, Nifty Bank and Nifty Private Bank indices shed over 3 percent in intra-day deals
Shares of banks and financial stocks were under pressure on Friday after the Reserve Bank of India (RBI) extended the moratorium period by another three months till August 31, 2020.
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Nifty Financial Services, Nifty Bank, and Nifty Private Bank indices shed over 3 percent in intra-day deals today as compared to a 1.2 percent decline in the benchmark Nifty 50 index.
RBI Governor Shaktikanta Das came out today for the third time with a set of measures to alleviate distress in the economy caused due to the COVID-19 pandemic. He announced a 40 basis points repo rate cut to 4 percent from 4.4 percent earlier. The Monetary Policy Committee held an out-of-cycle review meeting from May 20-22 and the policy stance was maintained 'accomodative' until the growth revived.
At 1:40 pm financial stocks like HDFC Bank, HDFC, ICICI Bank were all in the red with the latter two taking hits of more than 5 percent.
Other stocks like Bandhan Bank, Axis Bank, Federal Bank, RBL Bank and IndusInd Bank from the Nifty Bank index lost between 3 percent and 5.5 percent. Heavyweights like SBI also slipped 1.5 percent to hit its 52-week low of Rs 149.55, while Kotak Bank and HDFC Bank lost over 2 percent each.
In the financial index, Bajaj Finserv shed over 9 percent, whereas Shriram Transport, M&M Finance, Bajaj Finance also declined over 5 percent each.
Earlier in March, the central bank had allowed a three-month moratorium on payment of all term loans due between March 1, 2020, and May 31, 2020. Today's makes it a total of six months moratorium on loan EMIs. He also added that the accumulated interest on the loan during the moratorium period can be converted to term loan which can be repaid by March 2021.
Meanwhile, the sentiment was also negative after Das said the GDP growth in FY21 is expected to be in the negative territory.