HDFC Twins On Sale – Why They’re Under Pressure

(CTN News) – Due to MSCI’s announcement that the weight of the merged entity of HDFC Bank Ltd and HDFC Bank would be calculated using an adjustment factor of 0.50, HDFC twins have been under sell-off stress since early morning deals began.

It is noteworthy that HDFC Bank shares opened lower on Friday morning and went on to hit an intraday low of ‘1,626.20 apiece on the NSE within a few minutes of the stock market opening.

Moreover, there has also been a downward gap in Ltd shares today, as they opened with a negative gap today, and then went on to hit an intraday low of 2,718 per share on the NSE today.

The stock market opened today at around 50 minutes ago, and both of the stocks are down by a total of 4.50 percent after about 50 minutes of trading.

According to stock market experts, HDFC twins share price has been falling today as a result of MSCI’s announcement that it will use a 0.50 adjustment factor for computing the weight of HDFC Bank’s merger entity, resulting in a decrease in the share price.

There was, however, a consensus that it was a short-term sentiment that would not last for long, according to them.

As a long term investor, they advised you to take advantage of this fall since both stocks are expected to bounce back strongly in the near future and gain a lot of ground.

In spite of strong Q4 results, HDFC’s twins are falling in value

Avinash Gorakshkar, Head of Research at Profitmart Securities, commented on the reason for the decline in shares and HDFC Bank shares, which he pointed out was that MSCI has announced that they are going to use an adjustment factor of 0.50 for calculating the weight of the merged entity of HDFC Bank.

Consequently, this will result in an erosion of $150 million market weight for HDFC Bank, which is the reason why Dalal Street has gone negative on the twin companies.”

Avinash Gorakshkar, an analyst with Avinash Gorakshkar & Co, however, maintained that both stocks will bounce back strongly as both entities have strong fundamentals, and they have recently released strong Q4 numbers that indicate that they are on track.

Considering both stocks are very strong portfolio stocks for a long-term investor, bargain hunters should take advantage of this dip as an opportunity to buy both stocks at a discounted price.

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