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HDFC Bank share price touches all-time high, closes at Rs 1,768.35 | News on Markets


HDFC Bank | Image credits: Bloomberg

HDFC Bank’s share price closed at an all-time high on Wednesday on hopes that the private sector lender’s weight in the MSCI Emerging Market index will double in August.

The optimism was sparked after the foreign portfolio investor (FPI) holdings in the bank slipped below 55 per cent, the threshold set by the global index provider.

Its share price closed at ~1,768.35, up 2.18 per cent from the previous day’s close.

Moreover, the American Depository Receipts (ADR) of the bank rallied 4.48 per cent overnight to close at $66.97.

According to the bank’s disclosure, as of June 2024, foreign shareholding is down to 54.83 per cent from 55.54 per cent in March 2024.

The current foreign shareholding in the bank is lower than 55 per cent, which is essential to take the adjustment factor in MSCI from 0.5x to 1x. And hence, MSCI weight of HDFC Bank could double in August rebalance, a report by Macquire Research said on Wednesday.

HDFC Bank’s weight in MSCI India is 3.9 per cent and that could go up to 7.8 per cent, attracting passive inflow of around $5.2 billion, the report added.

HDFC Bank share price has gained 19 per cent from June 4 onwards, ending its prolonged underperformance.

The stock has outperformed the Nifty Bank Index and the Nifty benchmark index, which were up 13 per cent and 11 per cent, respectively, during the same period.

Analysts are expecting a further upside to the stock in the run up to the rebalancing of its weight in the MSCI Index in August.

According to IIFL Alternative Research, HDFC Bank’s share price will gain 4-6 per cent in the run up to the weight up event.

First Published: Jul 03 2024 | 6:44 PM IST

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