HDFC: Shares of HDFC Bank and Housing Development Finance Corp (HDFC) hit a 52-week low on Tuesday with Nifty Bank entering a bearish trend. HDFC Bank has touched a 52-week low for the second consecutive session.
At 2.15 pm, HDFC Bank’s stock is down 1 per cent at Rs 1,311 and HDFC’s stock is trading down about 1 per cent at 2,107.
The weakness in both the heavyweights has been attributed to selling pressure in financial sector stocks amid continued foreign fund outflows.
There is pressure due to selling of FIIs
Market expert Ajay Bagga told CNBCTV18.com, “The valuations of India’s financial sector are at attractive levels. But FII selling is not allowing the prices to settle and consolidate. As of now, we are following the global price trends.”
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Provisional data shows that FIIs have pulled out Rs 26,096.7 crore from the Indian equity market so far in March 2022, which could be the sixth month of outflows for Dalal Street. From October to February, he has sold a total of Rs 1.9 lakh crore.
Best selling financial companies
Bagga said, “Despite seeing capital inflows into EM funds, FIIs continue to sell-off in India. Most of the selling is happening in financial companies. Once the selloff subsides, we will see a bottom forming and then an uptrend.”
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Investors are cautious due to the ongoing uncertainty due to the Russia-Ukraine war and the rise in crude oil prices. This comes at a time when sentiments have been dented by fears of premature interest rate hikes during the pandemic.
Can bet for long term
As of Monday, the Indian equity benchmark is down 15 per cent from its October, 2021 all-time high. Earlier, both Sensex and Nifty had seen a great rally on the basis of liquidity.
IDBI Capital Markets Head (Research) AK Prabhakar advises investors with a long-term view to buy HDFC group stocks, which he says are trading at “extremely attractive” levels.
technical view
Hemen Kapadia of KRChoksi Securities is not very enthusiastic about HDFC Bank in the current times. He said, the stock shows short, medium as well as long term downtrend. Kapadia said, “While the outlook is negative in the near term, we may see some strength on the back of excessive selling. But this potential bounce is going to be a recovery, not a rally.”
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