Profit-Taking Hits HDFC Bank, Shares Plummet by 3.50%

HDFC Bank's shares dropped by nearly 3.50% amid profit-taking, erasing Rs 42,205.92 crore from its market valuation. The stock's decline was triggered by lower-than-expected passive fund inflows from the recent MSCI index rebalancing, leading to a dip in benchmark indices like BSE Sensex and NSE Nifty.

Shares of HDFC Bank faced selling pressure on Tuesday, declining nearly 3.50% amid profit-taking, wiping out Rs 42,205.92 crore from its market valuation.

The decline was partly attributed to likely lower-than-expected passive fund inflows from the recent MSCI index rebalancing.

The blue-chip stock plunged 3.46% to close at Rs 1,603.60 on the BSE, having dropped as much as 3.60% intraday. It also dipped 3.42% to settle at Rs 1,603.20 on the NSE.

"HDFC Bank declined due to lower-than-expected passive fund inflows in the recent MSCI index rejig," stated Vinod Nair, Head of Research at Geojit Financial Services.

The bank's market cap fell by Rs 42,205.92 crore to Rs 12,21,541.23 crore, making it the biggest laggard among the 30-share BSE Sensex firms.

This downturn in the blue-chip stock contributed to a broader market decline, with the BSE Sensex falling by 692.89 points or 0.87% to end at 78,956.03, and the NSE Nifty tumbling 208 points or 0.85% to 24,139.

Experts suggest that the MSCI rebalancing led to mixed reactions among stocks, with HDFC Bank facing pressure due to phased inflows amounting to over USD 1.8 billion.

"HDFC Bank is currently under pressure after outperforming the market in anticipation of the MSCI rebalancing," noted Santosh Meena, Head of Research at Swastika Investmart Ltd.

Arvinder Singh Nanda, Senior Vice President of Master Capital Services Ltd, added, "The weightage of HDFC Bank in the MSCI Global Standard Index is expected to rise in two tranches, even though the market had anticipated a single tranche increase."