New indices introduced by NSE ON January 11th, 2021, is now attracting volumes. Nifty Financial services Index is available for weekly as well as monthly contracts. The expiry of the contract is the last Thursday of the week for weekly settlement and the last Thursday of the month for monthly expiry. As the name illustrates all the banking, finance, and insurance are part of the index. The size of the contract is 40. The base date of the index is January 1st 2004 with a base value of 1000. The symbol of the index is FINNIFTY. 20 following stocks are the part of FINNIFTY:
HDFC BANK
HDFC
ICICI BANK
KOTAK BANK
AXIS BANK
BAJAJ FINANCE
SBI
BAJAJ FINSERV
HDFC INSURANCE
SBI LIFE INSURANCE
ICICI LOMBARD
SHRIRAM TANSPORT FINANCE
ICICI PRIDENTIAL
PIRAMAL
BAJAJ HOLDINGS
CHOLAMANDALAM
HDFC AMC
POWER FINANCE CORP.
REC
Mahindra and Mahindra Finance
The top 4 stocks HDFC Bank, HDFC Ltd., Kotak Bank, and ICICI Bank have the weight of 70% in the mentioned index. Rest all 16 stocks have 30% weight in the index hence top 4 are the main driver or the mover of the index price. The weightage of the stocks is calculated on the basis of free-float market capitalization.
The banks have approximately 63% presence in Financial Services Nifty and 100% in the Bank Nifty. Can it be a good arbitrage between the two indexes? Banks have a 26% share in Nifty 50 and near to 20% in Nifty 500.
The key point is insurance companies and NDFCs are part of a key index now.
Market Cap of HDFC Bank is 871417 Crores as of Feb. 10th, 2021. HDFC Ltd. 498132 Crs., Kotak Bank 386691 Crs., ICICI Bank 436719 Crs. In the total market cap of all the 4 are at 200000 Crs. plus. As per an estimate, HDFC bank will declare a net profit of more than 30000 Crs in the financial year ending March 2021. This is going to be the lifetime highest profits for the bank. ROE should be above 17% which is very good for a bank. It’s trading at the PE ratio of 29 current financial years, which is also at a lifetime high. Price-wise 1617-1655 is a trend deciding range for the HDFC Bank.
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Weekly support and resistance levels with trend decider for Nifty, Bank Nifty, Indian top 100 stocks, Dow Jones, Nasdaq 100, Gold, Silver, and Crude listed at NSE, BSE, and MCX.
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