HDFC Bank Stock Hits Record-high On Hopes Of MSCI Inclusion
HDFC Bank may get up to USD 5 billion in MSCI funding as a result of this inclusion
Sangeet Kumar Sanu
The stocks of HDFC Bank hit record-high of Rs 1,794 in the Wednesday trading session as the private lender is likely to get more weightage in the global MSCI index.
HDFC Bank stock traded at Rs 1,776 with 2.63 per cent gain in afternoon session on the National Stock Exchange (NSE).
Given that foreign ownership of HDFC Bank is 54.83 per cent as of June 2024, the bank is eligible for an increase in MSCI weight in the August 2024 rebalancing.
The most recent foreign ownership increases the stock's ‘foreign room’ to above 25 per cent, which is required for the index provider to include a stock at its full market-cap weight.
As per MSCI regulations, a security may be included to the index at market capitalisation if at least 25 percent of its shares are accessible to foreign investors.
Notably, HDFC Bank might get up to USD 5 billion in MSCI funding as a result of this inclusion. It has a 3.89 per cent weightage and ranked fourth in the MSCI India Index. Currently, 19.2 per cent of MSCI emerging market (EM) is made up of India.
In March 2024, foreign holdings in the bank's equity stood at 55.54 per cent, with the investment headroom for foreign portfolio investors (FPIs) standing at 24.95 per cent.
Technical Guide For HDFC Bank
“The trend is resilient, with price action trading determined to reach uncharted territories, forming ‘higher high and higher low’ formation. Immediate support emerges at 1,650, followed by 1,600, which are its crucial breakout marks in the recent upward trend. Moreover, the formation of the ‘golden cross’ has further strengthened the optimistic outlook, with the price aiming to hit the Rs 2,000 mark in the near future,” said Avdhut Bagkar, Derivatives and Technical Analyst, at StoxBox
Despite the stock trading in the overbought category of Relative Strength Index (RSI), the price action is displaying robust momentum to scale higher levels, added Bagkar.
Stock Performance
In 2024 so far, HDFC Bank stock rose 4 per cent against 10 per cent increase in benchmark index, Nifty Bank.
However, In the last three months, HDFC Bank rose more than 20 per cent compared to 11 per cent gain in Nifty Bank.
