Shares of HDFC Bank rose in Wednesday's session (December 4) to a fresh high for the second straight session to Rs 1,844.8 per share on the BSE. The gains in the heavyweight stock also lifted headline indices with Nifty touching 24,552 levels in trade today.

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The stock has been gaining for four straight session and has inched higher by around 3 per cent from Rs 1,793 as at the close on November 28.

The stock's market capitalisation is at Rs 14.09 lakh crore.

The sharp gains in the stock are being spurred as a result of the recent quarterly rebalancing of the Morgan Stanley Capital International (MSCI) indices. This important rebalancing event is projected to draw in substantial foreign institutional investment, with estimates suggesting that around $1.88 billion will flow specifically into HDFC Bank.

HDFC Bank, now the largest private-sector bank following its merger with HDFC Ltd., showcases a formidable market position through its strong CASA ratio and balanced loan portfolio. 

G, Chokkalingam- Founder- Equinomics said, short term outlook remains robust for the counter. Bank is taking significant efforts to reduce credit deposit ratio. The expert added that though industry credit growth has slowed down , still it is growing in double digits. This augurs well for HDFC Bank. 

Tactically unlocking value through public issue of its financial services subsidiary will provide some significant short term trigger for the stock, added Chokkalingam.

Banks exhibit remarkable growth across retail and wholesale lending segments, positioning them as top investment choices for long-term investors seeking stability and consistent performance in the Indian banking sector, noted Atul Parakh, CEO of Bigul.

Technical view

Jigar Patel, Sr. Manager- Equity Research said, "Historically, HDFCBANK has encountered significant resistance in the 1800–1790 range, with the stock reversing direction from this level on three to four notable occasions. This repeated rejection has firmly established the zone as a critical hurdle for upward momentum, highlighting the presence of strong supply and selling pressure in this area. However, at the current juncture, HDFCBANK has successfully breached the 1800 level, demonstrating bullish strength, and is now trading near the 1860 mark."

As the stock progresses, the 1886.25 level emerges as a critical resistance, serving as a potential inflection point. A decisive breakout above this level could pave the way for a move toward the 1972 mark, signalling a continuation of the uptrend. On the downside, immediate support can be expected around the 1840 level, followed by the previously breached 1800 zone, which may now act as a strong base. Traders should monitor price action closely at these levels to identify potential reversals or breakout opportunities, added Patel.