Shares of HDFC Bank extended their decline in morning trade on Wednesday, continuing a weak run amid cautious investor sentiment across banking stocks. As of 12pm am, shares of the private lender were trading at Rs 931.45, down Rs.5.90, or 0.63 per cent, adding to losses seen over recent sessions against the previous close of 936.45.The continued slide in HDFC Bank shares reflects a mix of stock-specific and broader market factors. Investors remain wary as benchmark indices stay under pressure, with financial stocks bearing the brunt of risk-off sentiment amid global uncertainty and concerns around earnings visibility.Market participants point to sustained profit booking in heavyweight banking stocks as one of the key reasons behind the weakness.
Caution ahead of the bank’s upcoming quarterly results has also weighed on sentiment. Investors are closely watching trends in loan growth, deposit mobilisation and margins, especially in a high interest-rate environment where funding costs remain elevated. Any signs of pressure on margins or slower growth could influence near-term stock performance. In addition, the banking sector has seen increased volatility as investors reassess valuations following a strong run in previous quarters. While HDFC Bank continues to be viewed as a long-term compounder, near-term expectations have moderated, leading some investors to trim positions.
On the other hand, In a note, CLSA reiterated its ‘Outperform’ rating on HDFC Bank with a target price of Rs 1,200 per share. The brokerage noted that the stock has corrected 6-7 percent since the Q3 FY26 operational update. HDFC Bank, India’s largest private sector lender by market capitalisation at about Rs 14.4 lakh crore, is currently valued at around 19.9 times earnings, with a dividend yield of roughly 1.18 percent. The bank is scheduled to report its Q3 FY26 earnings on Saturday, January 17.