Market Turmoil: HDFC Bank’s Q3 Results Trigger Sharp Decline; Global Factors Add to Volatility
In a tumultuous day for Dalal Street, the S&P BSE Sensex witnessed its steepest fall in 2024, plummeting 1,071.18 points to 72,057.59, while the NSE Nifty50 tumbled 294.40 points to 21,737.90. The bloodbath was primarily instigated by HDFC Bank’s share price slump following its Q3FY24 results, contributing a massive 700-point drop to the Sensex. Concerns over the bank’s margin performance and the reliance on tax write-backs for its net profit fueled the sell-off.
The downturn rippled through the banking and financial services sector, with ICICI Bank (-140 points), Kotak Mahindra Bank, State Bank of India, and Axis Bank collectively adding 120 points to the decline. Analysts expressed apprehensions about HDFC Bank’s near-term net interest margin (NIM) and valuation multiples.
Global factors exacerbated the situation, as fragile sentiment across Asia persisted due to China’s disappointing GDP data and concerning youth unemployment figures. The hawkish comments from the US Federal Reserve, particularly from Fed Governor Christopher Waller, further fueled negative cues. Waller emphasized caution in cutting benchmark interest rates, impacting overnight US stocks and influencing India’s market.
Santosh Meena, Head of Research at Swastika Investmart Ltd, advised investors to consider the bullish momentum in PSU banks amid market weakness. He identified key support zones for Nifty and Banknifty, emphasizing a cautious approach in the current market scenario.
As the market navigates uncertainties, investors are urged to stay vigilant and consider diversified strategies to mitigate risks in the evolving financial landscape.
