HDFC Bank hit a 52-week low of Rs 1,336.7 during the session before recovering most of the day's losses. The heavyweight failed to keep the Nifty Bank in positive territory.
HDFC Bank bounced back after hitting a 52-week low in a volatile session on Friday, but failed to finish the day above the flatline. A smart comeback in the heavyweight stock rescued the Nifty Bank from the red zone but lost steam towards the end of the session, which saw the banking indes gyrated in a range of more than 1,000 points.
It was a wild day for Dalal Street investors as heightened geopolitical tensions once again sent jitters across world markets. Investors tracked news on the Russia-Ukraine war closely after Ukrainian authorities said Russian forces captured the Zaporizhzhia plant after attacking it in the early hours of Friday.
The headline indices came close but failed to make it to positive territory after a gap-down start on Dalal Street.
The Nifty Bank slumped as much as 2.4 percent during the session, but managed to narrow the day's loss to 0.5 percent at the close.
HDFC Bank shares dropped as much as 2.5 percent to Rs 1,336.7 apiece on BSE, breaching the 52-week low of Rs 1,353.1 (April 2021). The stock finished the day down 0.3 percent at Rs 1,366.6, having briefly turned positive to touch as high as Rs 1385.6 during the session.
Other stocks in the banking space also bore the brunt of market-wide selling pressure, though managed to keep away from their 52-week lows. SBI, ICICI Bank, Axis Bank, Kotak Mahindra Bank and IndusInd fell around 1-3 percent.
The sell-off in the Nifty Bank was due to the weak global scenario, Rahul Sharma of Equity99 Advisory, told CNBCTV18.com. He believes the banking space will recover fast once the situation comes under control.
"History shows that banks are the worst hit in the times of crises... HDFC Bank has remained weak after the change in management and also falling considering the selling by FIIs in Indian markets," he said.
March could be a sixth straight month of FII outflows for Indian shares. Provisional exchange data shows that in March alone, they have net sold shares to the tune of worth Rs 10,984 crore. However, DIIs have made net purchases of Rs 7,860.9 crore during this period.
Sharma suggests investors to adopt a buy-on-dips strategy in quality counters.
HDFC Bank -- the largest Indian bank by market capitalisation -- is among the top three stocks with maximum weightage in the benchmark Nifty50 index.
The Nifty Bank has declined 3.9 percent in the past one year. Here's how its constituents have fared, as against the Nifty's 7.7 percent return:
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The banking index began its recovery from the crucial support zone of 34,020-34,000 -- levels witnessed during the heavy selling of December 2021, said Sharma. "Going ahead, a break below 34,000 will surely lead to heavy selling pressure, which can drag it next support levels at 33,500-33,200," he added.
First Published: IST