New Delhi: HDFC Bank shares have come under sharp selling pressure over the past two trading sessions, weighing on broader market sentiment. On Tuesday, the stock declined 2.2 per cent, extending its two-day fall to about 4.5 per cent. From its record high of ₹1,020, touched on October 23, 2025, the stock has corrected nearly 6.3 per cent.
In comparison, the benchmark BSE Sensex has declined a modest 0.9 per cent over the same two-day period, highlighting the stock-specific nature of the sell-off in HDFC Bank. The recent decline has also dragged the stock below its crucial 200-day moving average (200-DMA), a key technical level closely tracked by market participants.
Market experts attribute the sudden weakness in the stock to a combination of foreign investor selling and nervousness among domestic investors following the bank’s third-quarter business update for Q3FY26.
According to Kranthi Bathini, Director of Equities at WealthMills Securities, the selling pressure intensified after the Q3 update, even though the numbers were largely stable. “The loan and deposit growth has been decent for a bank of HDFC’s size. The main overhang on the stock is heavy selling by foreign portfolio and institutional investors, who hold a significant stake in the bank,” he said.
As per the Q3FY26 business update, HDFC Bank’s loan book grew 11.9 per cent year-on-year to ₹28.44 trillion during the October–December quarter. The deposit base rose 11.5 per cent year-on-year to ₹28.59 trillion over the same period.
The bank’s credit-to-deposit (CD) ratio edged up to 98.5 per cent at the end of Q3FY26, compared with 98 per cent in Q2FY26 and 95 per cent in Q1FY26. A rising CD ratio typically raises concerns about a bank’s ability to fund future loan growth, as it signals tighter liquidity.
However, analysts believe the elevated CD ratio should not be viewed as a major risk in isolation. Bathini noted that a CD ratio close to 99 per cent is “not a big concern” for a large and well-capitalised lender like HDFC Bank.
“Investors should avoid panic selling. HDFC Bank continues to have a strong balance sheet and sound fundamentals. With the economy entering a phase of credit growth and the likelihood of an easing monetary policy cycle, large banks like HDFC are well-positioned to benefit over the medium term,” he added.
While near-term volatility may persist due to technical factors and foreign investor activity, analysts suggest that long-term investors should focus on the bank’s fundamentals rather than short-term price movements.