How does Indian market stack up against Asian peers when it comes to recent correction?
Also Read: Dalal Street bleeds: Mcap of these 5 private sector banks declines by ₹1.44 lakh crore in a day On Tuesday (January 16), HDFC Bank released its December quarter numbers (Q3FY24), missing the street estimates in deposit and liquidity metrics. The rising cost of funds and tight liquidity have impacted the NIMs. The bank reported a drop in net interest margin (NIM) on total assets to 3.4% from 3.65% in the previous quarter (Q3FY23).
It's worth noting that the NIM stood above 4% for the bank before its merger with the parent company, Housing Development Finance Corp. (HDFC). Also Read: A $21 billion rout in India’s banks signals best days may be over Investors swiftly offloaded HDFC Bank shares in response to its lackluster performance, causing the bank to shed ₹1.4 lakh crore in market capitalisation over a brief two-day span between January 17 and January 18.
The significant 14% weightage of the bank in the Nifty 50 and a substantial 30% weightage in the Nifty Bank index have exacerbated the market decline. Beyond HDFC Bank concerns, a confluence of global factors, including a surge in US bond yields, dwindling expectations for immediate rate cuts from the US Federal Reserve, substantial FPI outflows, a one-month high for the US Dollar, the strong spike in crude oil prices, and Red Sea shipping woes, has exerted additional pressure on the markets. Also Read: FPIs’ bear flip may maul markets more The surge in US bond yields has led Foreign Portfolio Investors (FPIs) to withdraw from emerging markets, resulting in the sale of ₹20,000 crore worth of Indian stocks between January 17 and January 18.
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