Equity Alert: HDFC shares down nearly 3%; outlook bleak

[K.Karthik Raja]

Equity Alert: HDFC shares down nearly 3%; outlook bleak
MUMBAI--11:17AM--Shares of Housing Development Finance Corp were
down
2.89% at 2,000 rupees on concerns rising inflation might spur further
hike
in interest rates and result in a slowdown in credit growth, dealers
said.
Rising interest rates would dent demand for housing projects, as
cost of
borrowing will increase both for developers and customers.
Analysts said reports that Citigroup, which holds 11.74% stake in
HDFC, is
exploring options to sell its stake in the company, will not impact
HDFC.
"The stock is down today not because of this (Citigroup news)
reason, but
because of general market conditions," Ajay Parmar, head of research,
Emkay
Global Financial Services, said.
Another analyst at Religare Securities said, "Citi is in a
financial
turmoil, and it is selling the stake to book profits. There would be
no
reaction in HDFC or HDFC Bank".
Dealers said shares look weak on technical charts, with immediate
support
at around 1,978 rupees.
So far, 141,207 shares of HDFC have been traded on NSE.
July futures of the stock were trading at 5-point discount to the
spot
price.
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