Sensex, FTSE rejig is taking place on 15th September and this is expected to fuel some inflows in Nifty index shares like HDFC Bank, Axis Bank, State Bank of India (SBI) and Tata Motors. This may help Nifty to climb a new peak as Nifty heavy weight HDFC Bank shares are expected to witness inflows to the tune of $600 million after this Sensex, FTSE rejig taking place on 15th September next week.
Inflows in HDFC Bank
Speaking on how important HDFC Bank shares are for Nifty hitting new high, Chandan Taparia, Derivative & Technical Analyst at Motilal Oswal said, “HDFC Bank shares hold around 15 per cent weightage in Nifty index and hence any rally in HDFC Bank shares price from here would be a good sign. We believe that for Nifty to hit a new life-time high, HDFC Bank share price has to go close to ₹1,700 apiece levels.” He said that Sensex and FTSE rejig expected on 15th September is expected to fuel buying interest in HDFC Bank shares as FTSE is expected to include HDFC Bank shares in upcoming rejig.
On how this FTSE and Sensex rejig would impact HDFC Bank and other Nifty majors, Nuvama says, “HDFC Bank is set to experience a substantial $600 million inflow as per Nuvama Alternative & Quantitative Research calculations. The HDFC Bank rejig is well flagged off for couple of days now but still we expect 3-4 per cent run up.” Nuvama said that FTSE adding HDFC Bank shares in the index would attract around $500 million inflows whereas Sensex rejig would add around $102 million inflows in HDFC Bank shares.
Nuvama went on to add that inflows are likely in some other Nifty majors like Axis Bank, Bharti Airtel, SBI and Tata Motors. It said that Axis Bank is expected to attract around $10 million inflows whereas Bharti Airtel, SBI and Tata Motors are also expected to attract $9 million, $8 million and $3 million inflows respectively.
Looking at the weight of Nifty stocks that are expected to experience inflows after the Sensex, FTSE rejig, it seems that stocks like HDFC Bank, Axis Bank, Bharti Airtel, SBI and Tata Motors constitute around 25 per cent of the net weight of the Nifty stocks.
On how this rejig may enable Nifty to hit a new high, Chandan Taparia of Motilal Oswal said, “Reliance share price has been under the sell off heat and it is already discounted much after the Jio Financial Services shares. So, possibility of further dip in the Sensex heavyweight are very grim. So, I am expecting a bounce back in Reliance share price in near term. As Reliance shares hold around 10 per cent weight in Nifty, shares that hold near 35 per cent weight in the 50-stock index. So, this Sensex FTSE rejig may fuel Nifty to a new high in near term.” He said that Reliance share price may go up to ₹2,650 apiece levels in near term pulling Nifty index to a new peak.
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Updated: 08 Sep 2023, 02:57 PM IST