India Stocks: Slide in HDFC, HDFC Bank erases weekly gains for Indian shares

Housing Development Finance

05/05/2023 11:21

(Updates closing levels)
    By Bharath Rajeswaran
       BENGALURU, May 5 (Reuters) - Indian shares declined on
Friday and erased weekly gains amid weakness in financials
stocks due to declines in Housing Development Finance Corp and
HDFC Bank, and persistent fears over the U.S. banking sector.
    The Nifty 50  .NSEI  closed 1.02% lower at 18,069.00, while
the S&P BSE Sensex  .BSESN  lost 1.13% to 61,054.29.
    Financials stocks  .NIFTYFIN  led the slide in the Nifty,
falling 2.34% in the worst single-day drop in over three months.
    Housing Development Finance Corp Ltd  HDFC.NS  and HDFC Bank
Ltd  HDBK.NS  declined over 5.5% each after MSCI said it
included the merged entity of the two companies in its large-cap
index, but with an adjustment factor of 0.5.
    Nuvama Research estimated this would lead to an outflow of
$150 million to $200 million from the entity.
    "The event is one-time, but the businesses 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 monitorable 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.
        European Central Bank's rate hike and concerns in the
U.S. banking sector due to the collapse of PacWest Bancorp also
dragged investor sentiment.
    Among individual stocks, TVS Motor Company Ltd  TVSM.NS 
jumped nearly 4% to a record high after reporting an uptick in
March-quarter profit.
    The auto index  .NIFTYAUTO  rose 0.40% and was among the top
sectoral gainers in a weak market.
    Shares of shadow lender Manappuram Finance Ltd  MNFL.NS 
fell over 11% after India's financial crime agency, Enforcement
Directorate said it froze assets of the company worth 1.43 bln
rupees.

($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))