Axis Bank was top loser in the Sensex after S&P rating cut

Shares of Axis Bank on Monday declined nearly 5 per cent after S&P Global Ratings lowered its ratings of the lender due to increased economic risks for banks operating in India.

The stock plunged 5.21 per cent to Rs 402.90 during the day on the BSE. Later, it closed at Rs 404.75, down 4.78 per cent. On the NSE, it tanked 4.69 per cent to settle at Rs 404.90.

Axis Bank was the top loser in the Sensex pack.

In terms of volume, 19.23 lakh shares were traded on the BSE and 3.63 crore on the NSE. "We lowered our ratings on Axis to reflect our expectation that heightened economic risks facing India's banking system will affect the bank's asset quality and financial performance," S&P said on Friday.

While Axis Bank's asset quality is superior to the Indian banking sector average, its level of non-performing assets will likely remain high compared to international peers, it noted.

The agency said economic conditions have turned adverse for Indian banks due to COVID-19 and drastic efforts to curtail the spread of the virus have resulted in a sharp economic contraction.

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