HDFC merger brings momentum to the market, Sensex gains 1,335 points

The announcement of the merger of India’s largest mortgage lender HDFC Ltd. with HDFC Bank, the largest private sector bank, fueled sharp market sentiment with major indexes up more than 2%.

The S&P BSE Sensex rose 1.335. 05 points or 2.25% to 60,611.74.

The gains were led by HDFC Bank, which rose 9.97% followed by HDFC Ltd., which rose 9.3% at the close. Other top gainers included Kotak Mahindra Bank, up 3.32%, HUL, up 2.24%, and Sun Pharma, up 1.95%.

The NSE Nifty 50 Index was also up 382.95 points, or 2.17%, to 18,053.40.

“The domestic market was buoyed by the HDFC bank and HDFC merger announcement, which lifted sentiment in stock markets and the financial sector,” said Vinod Nair, research director at Geojit Financial Services.

“The market’s upcoming focus will be on earnings reports and this week’s RBI meeting. Fourth quarter results will have a decent start, supported by the IT sector, while RBI is expected to stay flat with accommodative policy,” he added.

“We believe the next leg of the benchmark index rally will be driven by the BFSI area as banking firms are likely to post solid Q4FY22 earnings driven by sequential improvement in credit growth,” Naveen Kulkarni, Chief Investment Officer, Axis called securities,

“Furthermore, the trend of improving asset quality will continue during the quarter, adding further confidence to the space,” he added.

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