HDFC Bank lost almost Rs 1 lakh crore in market cap in three days – is there more decline to come in future?


Shares of HDFC Bank Ltd are down for the third consecutive day on Thursday and are one of the top contributors to the decline on the Nifty 50 index. In the last three sessions, India’s largest private sector lender has lost nearly Rs 1 lakh crore in market capitalisation.

HDFC Bank shares contributed 50 per cent of the Nifty 50’s fall during Wednesday’s trading session.

The stock’s 52-week low is Rs 1,365, while Rs 1,757 is its 52-week high, reached after the announcement of the merger with HDFC. At the current price, the Relative Strength Index (RSI) on the charts stands at 38 and is close to oversold levels. An RSI reading below 30 indicates that the stock is in oversold territory.

Ruchit Jain of 5paisa.com believes that the stock has been relatively underperforming since the merger announcement and prices may undergo some consolidation and correction in the near term. Immediate support is seen in 1,530 – 1,500 range.

HDFC Bank has been trading in a 200-point range for the last 10 months with a lower band of Rs 1,500 and an upper band of Rs 1,700, said Rupak Dey of LKP Securities. “Despite the recent sharp correction, the stock has not broken below this range, indicating its continued consolidation within these levels, with demand returning around 1,500,” he said. According to Dey, only a decisive break below the Rs 1,500 level will trigger a significant breakdown in the stock, otherwise the rangebound movement will continue.

Jigar Patel of Anand Rathi said that on the weekly charts, HDFC Bank is close to its Ichimoku cloud support of 1,550 along with a test of the bullish trend line from March 2020 lows. He expects the stock to bounce back from Rs 1,550 level in the near term.

HDFC Bank shares are trading 3.75 per cent lower at Rs 1,568.

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