Indian equities continued their upward trend for the second day, with Nifty and Sensex both registering gains of over 1.5%. Bank Nifty also saw an increase of nearly 2%, led by gains in HDFC Bank, ICICI Bank, SBI and Axis Bank. This surge can be attributed to the positive sentiment post the state election results, which have been deemed as highly positive for the market. Analysts predict that the rally may continue for a few more days, driven by short covering and bullish momentum. Meanwhile, Asian markets also traded in the green as the US Treasury secretary selection caused a downward movement in the dollar and bond yields.
HDFC Bank's stock soared to an all-time high as it received a delivery-based buying of Rs 31,135 crore as part of MSCI rebalancing. The private lender recorded a delivery volume of 17.4 crore shares, with a delivery percentage of over 81%, driving its market capitalisation to reach an impressive Rs 13.57 lakh crore. The November round of MSCI indices rejig is expected to bring in foreign passive flows of $2.5 billion, boosting the bank's weightage in the Global Standard Index. This news has attracted the attention of investors, with BSE Ltd. also recording a high delivery turnover worth Rs 2,928 crore.
In a significant move, India will see its weight in the MSCI Emerging Markets Index rise from 19.3% to 19.8% in 2024, leading to an estimated $2.5 billion in passive foreign inflows. This increase is largely due to notable upgrades for several Indian companies, including Kalyan Jewellers India Ltd., Voltas Ltd., and BSE Ltd. With no Indian stocks removed, India's total representation in the index expands to 156, and an additional 13 Indian stocks have been added to the MSCI Small-Cap Index. This surge in representation not only boosts India's weight in the index but also signals potential for further growth and upgrades in the future, solidifying its position in global markets.
HDFC Bank, one of the leading private sector banks in India, experienced a surge in its stock price today, hitting a 52-week high on the NSE at ₹1,794. The stock price rose by 3.07% on the NSE, trading at ₹1,783.65 as of 11:26 am. This increase in stock price is a positive indicator of the bank's performance and may attract investors looking for profitable options in the stock market.
The foreign investment limit for HDFC Bank has increased to 25.9% for the quarter ended June, which could lead to a significant weight increase in the MSCI EM Index. This could potentially bring in billions of dollars in inflows over a period of six days, providing a boost to the bank's stock performance. This comes as a result of MSCI's upcoming index revision in August.
The February review of the MSCI Emerging Markets Index saw the addition of five Indian stocks, leading to expectations of around $800 million to $1 billion in passive inflows of foreign funds. Public sector undertakings, including Punjab National Bank and Union Bank of India, were included in the large-cap index, while companies like GMR Airports Infra and Tata Motors were added to the mid-cap index. Additionally, ten stocks were also added to the MSCI India Domestic Index.