State Bank of India, HDFC to gain from Nifty Bank index readjustment

State Bank of India (SBI) and Housing Development Finance Corporation (HDFC) will see maximum inflows from passive trackers on account of the quarterly rebalancing exercise of the National Stock Exchange Nifty Bank Index.

IndusInd Bank and AU Small Finance Bank could see maximum outflows.

The rejig of the Nifty CPSE Index will result in inflows in Oil and Natural Gas Corporation, NTPC, and Coal India and maximum outflows in Bharat Electronics, according to Brian Freitas, a New Zealand-based analyst with Periscope Analytics.

While no new stocks are getting added or removed from these indices, the churn is due to adjustments to the weights of existing components.

The quarterly rebalancing will be done on June 29, but the changes will be based on closing prices as of June 27.

“Based on closing prices from June 14, the one-way turnover on the CPSE Index is 1.9 per cent, leading to a one-way trade of Rs. 410 crore, while the one-way turnover on the Nifty Bank Index is 2.1 per cent, leading to a one-way trade of Rs. 1,400 crore,” says Freitas, an independent equities analyst who publishes on Smartkarma.

The flows for the Nifty Bank Index may change if the HDFC and HDFC Bank merger is implemented before the end of June, he adds.