India Stocks: HDFC, HDFC Bank weigh on Indian shares amid weak global cues

Housing Development Finance

05/05/2023 06:15

(Updates levels, adds details, analysts' comments from
paragraph 4)
    By Bharath Rajeswaran
       BENGALURU, May 5 (Reuters) - Indian shares declined on
Friday, dragged by high-weightage financials and weak global
cues, after the European Central Bank hiked rates and fears over
the U.S. banking sector worsened with the collapse of PacWest
Bancorp.
    The Nifty 50  .NSEI  was down 0.26% at 18,208.70 as of 10:40
a.m. IST, while the S&P BSE Sensex  .BSESN  lost 0.32%.
    Financials stocks  .NIFTYFIN  led declines in the Nifty,
falling 1% as Housing Development Finance Corporation Ltd
 HDFC.NS  and HDFC Bank Ltd  HDBK.NS  lost 5% each, and were
among the top losers on the index.
    The decline comes after an update on MSCI implementation for
HDFC and HDFC Bank post their merger. MSCI said it will include
the merged entity in its large-cap index but the adjustment
factor would be 0.5.
    Nuvama Research estimated the implementation to lead to an
outflow of $150 million to $200 million in the merged entity.
    "The event is one-time, but the business of HDFC and HDFC
Bank are perpetual," said Avinash Gorakshakar, head of research
at Profitmart Securities, adding that the fall in the shares is
temporary.
    Analysts expected Nifty 50 to consolidate after the recent
rise on strong March-quarter earnings, but added that monsoons
would be a key monitor in the near term.
    "If monsoons are poor, it will spark a slide in markets due
to adverse impact on the country's predominantly agri-linked
economy and consumption," Gorakshakar added.
    Global markets were subdued, as the European Central Bank's
rate hike and concerns in the U.S. banking sector due to the
collapse of PacWest Bancorp dragged sentiment.  MKTS/GLOB 
    Among individual stocks, TVS Motor Company Ltd  TVSM.NS 
jumped over 5% to a record high after reporting an uptick in
March quarter profit.
    The auto index  .NIFTYAUTO  rose 0.7% was among the top
sectoral gainers in a weak market.

($1 = 81.6540 Indian rupees)

 (Reporting by Bharath Rajeswaran in Bengaluru; Editing by
Nivedita Bhattacharjee and Varun H K)
 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463))