Hello Friends,
Today got a News after Market Hours regarding HDFC BANK Ltd.
"HDFC BANK was removed from BAN List by The Reserve Bank of India."
What's so important about this news and what are the effects of this news on HDFC Bank alongwith Nifty and Banknifty.
We all know HDFC Bank is the Highest Weightage Stock in Nifty and Banknifty. The Stock is having a weightage of almost 30% in Banknifty. Any news abut a stock having almost 1/3 weight of the Index is to be considered important for overall Market.
What's so Crucial about the News ??
Tomorrow Morning, FII's can buy HDFC Bank in open Markets. Looks Simple, but it's a very important news. FII's Still were able to Buy the Stock from other FII's through a Special Window called FII Desk. They also need to Pay a Premium of almost 12% on the current market price.
in Open Market HDFC Stock Closed at 1327, on Special FII Window the Stock price Closed at 1482. This is the Difference in their purchase. FII are ready to pay the premium to buy stock like HDFC Bank.
Now the question is .. What would you do, if you are willing to pay Rs. 1482 for a Stock and Suddenly the Stock is available for Rs. 1327 ??? and it will be available at this price only for 2 days.Yes, Only for 2 days.. 17th Feb and 20th Feb. I won't say the Stock price will fill up the gap immediately tomorrow. But it will be a case of Flash Sale, and the Demand for the Stock will be High suddenly, resulting in atleast 5-6% rally in the Stock price. Can you imagine a Stock with 30% weightage in Banknifty running 5-6%... Where will it take Banknifty and Simultaneously the Weightage in Nifty is 8.22%, Big Impact to be seen on the indices.
Index wise,
Within Banknifty, HDFC Bank with 30% weightage and other Banks Like Kotak Mahindra Bank, Axis Bank and SBI are having good upside possibilities. They all Might push the Index big time. We might see a Rally of min 300 points in Banknifty, resulting in pushing the index High above Important Resistance Level of 20560. Those who follow me closely, know the importance of this level. Sorry Bears, but I think this time the level will be taken out.
Now the question is .. What would you do, if you are willing to pay Rs. 1482 for a Stock and Suddenly the Stock is available for Rs. 1327 ??? and it will be available at this price only for 2 days.Yes, Only for 2 days.. 17th Feb and 20th Feb. I won't say the Stock price will fill up the gap immediately tomorrow. But it will be a case of Flash Sale, and the Demand for the Stock will be High suddenly, resulting in atleast 5-6% rally in the Stock price. Can you imagine a Stock with 30% weightage in Banknifty running 5-6%... Where will it take Banknifty and Simultaneously the Weightage in Nifty is 8.22%, Big Impact to be seen on the indices.
Index wise,
Within Banknifty, HDFC Bank with 30% weightage and other Banks Like Kotak Mahindra Bank, Axis Bank and SBI are having good upside possibilities. They all Might push the Index big time. We might see a Rally of min 300 points in Banknifty, resulting in pushing the index High above Important Resistance Level of 20560. Those who follow me closely, know the importance of this level. Sorry Bears, but I think this time the level will be taken out.
Disclaimer :
The Author is a Global Market Expert and SEBI Certified Investment Adviser. He is not having any vested interest in the recommendation and not having any trading positions or holding of the stock, His Clients are already long in this stock since today afternoon :)
The Author is a Global Market Expert and SEBI Certified Investment Adviser. He is not having any vested interest in the recommendation and not having any trading positions or holding of the stock, His Clients are already long in this stock since today afternoon :)
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