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HDFC twins fall over MSCI’s statement despite solid Q4 performance

Within a few minutes of the stock market opening on March 5, Friday, HDFC Bank’s share price declined and touched an intraday low of $1,626.20 per share on the NSE. The share price of HDFC Ltd. today also began with a downward gap before hitting an intraday low of $2,718 per share on the NSE. After about 50 minutes of the March 5, Friday stock market opening, both stocks were down by a total of 4.50%.

The decline in the price of HDFC Bank shares and HDFC shares, according to stock market specialists,

Stock market analysts feel that the declaration by MSCI to adopt an adjustment factor of 0.50 for estimating the weight of the combined company of HDFC Bank and HDFC Ltd. is what caused the decline in HDFC shares and HDFC Bank share price. They did, however, urge long-term investors to profit from this decline since both equities are anticipated to rebound substantially in the near future. The HDFC Bank twins have received unfavorable attention from Dalal Street, but Profitmart Securities’ head of research Avinash Gorakshkar believes both equities will have a sharp rebound.

Avinash Gorakshkar gave the following explanation for the decline in HDFC shares and HDFC Bank share price: “MSCI has declared that they would adopt an adjustment factor of 0.50 for determining weight of combined companies.

Avinash Gorakshkar stated that MSCI’s announcement that they will adopt an adjustment factor of 0.50 for estimating the weight of the combined company of HDFC Bank and HDFC was the cause of the decline in HDFC shares and HDFC Bank share price. Since the market value of HDFC Bank will be reduced by $150 million as a result, Dalal Street has downgraded the HDFC twins.

In both scripts, Sumeet Bagadia, Executive Director at Choice Broking, advises maintaining a buy on dips approach. For a target price of 2,850 per share, HDFC shares can be purchased at the current market price, but a stop loss must be set at 2,650. The share price of HDFC Bank is strongly supported around 1,600 and is up against resistance at 1,750.

Newsdesk

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