HDFC Bank Share Price Hits All-Time High
HDFC Bank’s Share Price Surges to Record Levels
HDFC Bank, India’s largest private sector lender, saw its share price hit an all-time high on July 3, 2024, closing at ₹1,768.35, up 2.18% from the previous day’s close. This surge in the bank’s stock price was driven by several key factors:
Foreign Shareholding Drops Below 55%
The optimism around HDFC Bank’s share price was sparked by the fact that the bank’s foreign portfolio investor (FPI) holdings slipped below the 55% threshold set by the MSCI index provider. This development increases the likelihood of HDFC Bank’s weightage in the MSCI Emerging Market index being doubled during the upcoming August rebalancing.
Potential MSCI Index Weightage Increase
According to a report by Macquarie Research, HDFC Bank’s weight in the MSCI India index is currently 3.9%, and this could potentially go up to 7.8% after the August rebalancing. This could attract passive inflows of around $5.2 billion into the stock.
Outperformance Against Benchmarks
HDFC Bank’s share price has gained 19% since June 4, 2024, outperforming the Nifty Bank Index and the Nifty benchmark index, which were up 13% and 11% respectively during the same period. This has helped the stock end its prolonged underperformance.
Analyst Expectations of Further Upside
Analysts are expecting further upside to HDFC Bank’s share price in the run-up to the MSCI rebalancing in August. According to IIFL Alternative Research, the stock could gain 4-6% in the lead-up to the weight-up event.
In summary, the surge in HDFC Bank’s share price to an all-time high was driven by the potential increase in its weightage in the MSCI Emerging Market index, which could attract significant passive inflows into the stock. The bank’s outperformance against broader market benchmarks and analyst expectations of further upside have also contributed to the positive sentiment around the stock
