Nifty, Bank Nifty adjustment today; RIL, HDFC Bank stocks to see fund outflows, SBI, HDFC Life to get inflows

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September 29, 2021 10:39 AM

State Bank of India, Axis Bank, and HDFC Life Insurance are likely to witness the highest inflows today among Nifty and Bank Nifty constituents as the indices adjusted owing to the quarterly recapping and rebalancing done by NSE.

Nifty, Bank NiftyAmong Nifty Bank constituents, State Bank of India’s weightage is expected to increase to 12.6% from the current 10.61%, resulting in $103.8 million inflows. (Image: REUTERS)

State Bank of India, Axis Bank, and HDFC Life Insurance are likely to witness the highest inflows today among Nifty and Bank Nifty constituents as the indices adjusted owing to the quarterly recapping and rebalancing done by NSE. According to Edelweiss Alternative Research, the weightage of State Bank of India, Axis Bank, IDFC First Bank, and ICICI Bank will be increased in the banking index while heavyweight HDFC Bank could see a reduction in weightage. There will be no addition or exclusion from the indices. Stock indices are rebalanced semi-annually and quarterly based on the performance of the constituents and other eligible listed stocks. Adjustments made today will come into effect from tomorrow.

Bank Nifty changes

Among Nifty Bank constituents, State Bank of India’s weightage is expected to increase to 12.6% from the current 10.61%, resulting in $103.8 million inflows. Axis Bank’s weight is also expected to be increased to 12.6% from the current 11.48%, translating to $58.7 million in inflows. Further, Edelweiss Alternative research believes IDFC First Bank, and ICICI Bank see inflows worth $1.3 million and $0.3 million, respectively. Overall the total inflows expected for Bank Nifty are $161.5 million.

On the other hand, HDFC Bank is expected to see the most outflows at $82.1 million as its weight in the index is dropped to 28.01% from the current 29.59%. IndusInd Bank is expected to see the second-highest outflows at $38.8 million as its weightage is reduced to 5.38% from 6.12%. Federal Bank and Bandhan Bank are also among those that could see outflows as their weightage is dropped to 1.26% and 1.5%, respectively. Other bank stocks that may see outflows according to Edelweiss Alternative Research include Au Small Finance Bank, Punjab National Bank, RBL Bank, and Kotak Mahindra Bank.

Expected adjustment to Nifty 

On the 50-stock NSE Nifty, HDFC Life Insurance is seen to be the largest beneficiary in terms of inflows after the quarterly rebalancing. HDFC Life’s weightage is expected to increase to 0.87% from 0.77%, translating to inflows worth $22.8 million. JSW Steel is expected to be the second-largest beneficiary of rebalancing, attracting inflows worth $4.6 million. BPCL is also expected to see inflows worth $2.7 million.

Among the stocks expected to see fund outflows are Reliance Industries, which is expected to witness $4.4 million of outflows as its weight is dropped to 10.54% from the current 10.56%. Further Infosys and TCS are expected to see outflows worth $5.7 million with a reduction of 0.01% in their weight each.

Other expected changes to indices

According to Edelweiss, Nifty IT could see the inclusion of Larsen & Toubro Technology Services with 2.2% weightage, translating to $16.5 million inflows to the stock. Meanwhile, Oracle Financial Services is expected to be excluded from the index.

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