Published on: July 10, 2024
The Indian markets have been remarkably bullish, and this consistent positive trend has been a beacon of confidence for potential investment opportunities, reassuring investors about the stability and growth of the market.
In the first half of 2024, the Nifty has been a standout performer, consistently hitting new highs. The index has gained 10.43% in this period, a remarkable feat that underscores the strength of the Indian market. However, this impressive gain could have been even higher if the top three stocks by weight had outperformed the benchmark index. These top three stocks are Reliance Industries, which carries a weight of 11%; TCS weighs 7.4%, and HDFC Bank at 6.4%.
Reliance Industries has been a star performer, gaining 20.87% during the first half 2024. While not stellar, TCS has contributed positively, with a gain of 2.4%. However, HDFC Bank has been a different story.
Acting like a monster, HDFC Bank has lost 0.84%, dragging down the overall performance of the Nifty50. This underperformance has been significant enough to earn HDFC Bank the moniker of “the monster who ate a star.”
HDFC Bank’s impact has not been limited to the Nifty50. The giant has also been a monster in the performance of the Nifty Bank index.
The Nifty Bank index gained 8.54% in the first half of 2024, with SBI leading the charge with a staggering gain of 32.37%. SBI’s weight in the Nifty Bank index is approximately 18%, making its performance a significant boost to the index. ICICI Bank, the second-largest constituent by weight at 20%, also performed admirably, gaining around 20% during this period.
Source: RZone
Despite the strong performances of other stocks, HDFC Bank, with the highest weight in the Nifty Bank index at around 29.45%, has been the underperformer. Its negative influence has prevented the Nifty50 and the Nifty Bank indices from reaching even greater heights, highlighting the significant influence of individual stocks on market indices. Historically, HDFC Bank has been a strong performer, often seen as a bellwether for the Indian banking sector.
The point here is that a trader or an investor should continuously check for outperforming stocks and invest in those outperforming the benchmark and sectorial indexes. This can be done with the RS Matrix in the RZone.
Traders can go to RS Matrix and select Nifty Bank. Here is the result as of 30th June 2024.
In conclusion, the Indian markets have shown remarkable strength in the first half of 2024, with the Nifty and Nifty Bank indices posting impressive gains. However, the underperformance of HDFC Bank has been a notable drag on these indices, earning it the title of “the monster who ate a star.”
