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HDFC Bank Ltd crossed 8 trillion in market capitalization intraday on Wednesday, the first time the lender achieved this feat, becoming India’s third company and the first bank to reach the milestone.

In intraday trading, shares of HDFC Bank touched a record high of 1,464 apiece on BSE, lifting its market capitalization to 8.02 trillion. The stock, however, erased all its gains at closing, in line with an overall decline in the stock markets due to profit booking. The scrip closed 2.5% lower at 1,402.65 apiece, giving it a market value of 7.72 trillion. So far this year, HDFC Bank has surged nearly 12%. Among analysts covering the stock, 50 have a buy rating, three have a hold rating and one has a sell rating, according to Bloomberg data.

Slippery slope
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Slippery slope

Tata Consultancy Services Ltd and Reliance Industries Ltd (RIL) were the only two companies to have achieved this landmark so far. Currently, RIL is India’s most valued company with a market value of 13.17 trillion followed by TCS at 10.13 trillion.

Earlier in the day, after hitting a fresh record high, Indian markets slumped more than 1.5%, the biggest decline in six weeks, as investors booked profits after a sharp rally over the past few weeks.

The BSE Sensex ended at 43,828.10, down 694.92 points, or 1.56%, while the Nifty50 index closed at 12,858.40, down 196.75 points, or 1.51% lower. Both indices fell the most since 15 October. Investors lost 2.25 trillion from Wednesday’s decline.

“Markets drifted lower and lost over one and a half percent, taking a breather after the recent surge. Participants were in the profit-taking mood from the beginning, citing overbought markets and a cautious approach ahead of derivatives expiry," said Ajit Mishra, VP - research, Religare Broking.

The markets opened at a fresh record high with the 30-share Sensex soaring to an all-time high of 44,825.37, up 0.67%, while the Nifty50 touched a record high of 13,145.85, up 0.7% from its previous close.

So far in November, the Sensex has risen nearly 10.6% or 4214 points, while Nifty advanced 10.44% or 1216 points on the back of robust fund flow from overseas investors.

Foreign institutional investors (FIIs) purchased shares worth $7.35 billion in November so far, a record for a month by overseas investors. Year-to-date, FIIs have bought over $13 billion of Indian equities.

Analysts expect profit booking to continue in the short-term.

“It’s normal to see an intermediate dip in a trend and we may see further profit-taking ahead. Besides, volatility is also likely to remain high due to scheduled derivatives expiry," Mishra said.

Meanwhile, the US and other Asian markets continued on the positive trajectory with Dow Jones topping the 30000 mark for the first time, encouraged by news on vaccine developments and ease in political risks in the US. European markets were trading mixed.

Investors are now awaiting the September quarter gross domestic product (GDP) data on 27 November. The Indian economy is expected to post a recovery in the September quarter after contracting 23.9%in the June quarter. Rating firm Care Ratings expects the GDP to shrink 9.9% in the September quarter with the forecast for FY21 at -8.2%

Growth is expected to be positive in agriculture, forestry, financial services, real estate, professional services sectors, Care Ratings said in a 23 November report.

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