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HDFC twins continue downtrend amid post-budget equity sell-off

HDFC twins continue downtrend amid post-budget equity sell-off
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By Ajay Vaishnav  Jul 9, 2019 12:43:43 PM IST (Published)

Morgan Stanley downgraded equities from 'equal-weight' to 'underweight'.

Shares of HDFC Bank and Housing Development Finance Corporation (HDFC) have returned around 12 percent gains year-to-date. The two large-cap stocks from the HDFC group, however, have been under pressure after Friday's Union Budget as traders took to profit-booking, reacting to a host of proposals impacting minimum public shareholding norms and tax on super-rich.

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The sentiment further took a hit after global investment rating firm Morgan Stanley downgraded equities from 'equal-weight' to 'underweight' as the upside remains fairly limited from current levels.
HDFC shares have fallen over 3.3 percent in the last three days, while HDFC Bank has dipped slightly above 4.5 percent in the last five days.
The five-year return on HDFC Bank is almost 186.5 percent and the private sector bank has given almost 750 percent returns in the last 10 years. HDFC, on the other hand, has returned 117 percent in five years and over 377 percent in the last ten years.
Motilal Oswal, however, has retained HDFC as its top pick in the aftermath of the budget which has proposed a number of measures to deal with the ongoing NBFC crisis.
"The government’s first loss guarantee, the RBI as a regulator for HFCs, deepening of the bond markets, etc. augur well structurally for the NBFC/HFC space. After a prolonged period of uncertainty post the IL&FS default, such efforts should gradually improve risk appetite for the sector. We continue to prefer companies with a strong parentage; our top picks are HDFC and MMFS," it said in a report.
HDFC shares quoted at Rs 2,208.30, down by 2.29 percent on the NSE at 11.19 am, after opening at the day's high of Rs 2,248.85.
HDFC Bank shares were trading at Rs 2,379.05, lower by 1.27 percent, after opening at the day's high of Rs 2,403.85.
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