Moody's Investors Service today upped the long-term ratings of four Indian financial institutions including SBI and HDFC Bank by a notch to Baa2 following the upgrade of the country’s sovereign rating to the same level.

The four institutions with revised rating are Export-Import Bank of India (EXIM India), HDFC Bank, Indian Railway Finance Corporation Limited (IRFC) and State Bank of India (SBI), Moody's said in a statement.

In the case of HDFC Bank, the rating agency has also upgraded the bank's baseline credit assessment (BCA) and adjusted it to Baa2 from Baa3, it said. Moody's has assigned a stable outlook to SBI's DIFC branch.

The US-based agency today upped India's rating to Baa2 from Baa3 and changed its rating outlook to 'stable' from 'positive,' saying the reforms will help stabilize rising levels of debt.

Bank stocks today rose by up to 6 per cent after the Moody's upgraded India's sovereign credit rating by a notch to 'Baa2' with a stable outlook. Shares of PNB surged 6 per cent, Bank of Baroda soared 5.17 per cent, Yes Bank gained 4.16 per cent, SBI (3.91 per cent) and ICICI Bank (3.55 per cent) on BSE. The scrip of Axis Bank gained 2.64 per cent and HDFC Bank went up by 1.18 per cent. The BSE bank index also rose by 1.90 per cent to trade at 29,450.39.

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