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The mood of the broader markets hasn’t been good since the start of the week. Today, the two index heavyweights that have dented investors’ sentiments are -Reliance Industries Ltd (NS:) (down 1.6%) & HDFC Bank (NS:) (down 4.01%). Yes, that’s a pretty serious cut in India’s largest bank which has a market capitalization of INR 12,34,104 crore, which also makes it the 3rd largest NSE-listed company.
The stock has been hammered by investors after the bank said it might face some pressure on profit margins in the near term owing to the merger with HDFC Limited. This kind of weak commentary was not expected from such a strong bank and as a result, we are witnessing investors fleeing away from this counter.
Image Description: Daily chart of HDFC Bank with volume bars at the bottom
Image Source: Investing.com
As of 12:32 PM IST, the stock is trading 4.01% down at INR 1,563 and is just an inch away from breaking its crucial support level of INR 1,558. The almost vertical fall in the last two sessions has chipped away a total of 6% from the share price. This relentless fall might extend beneath the support which will be an extremely bad sign for the counter.
In case the stock slips below INR 1,558 which is around the lowest level since April 2023, the next level that investors can see is around INR 1,532, the lowest level of 2023. This is the highest-weighted stock in (13.68%) and (40.42%). Hence, traders trading in these two indices should also become cautious if the stock penetrates below its support.
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