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HDFC Bank falls 4% as rising COVID-19 cases weigh

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·1-min read
The headquarters of India's HDFC bank is pictured in Mumbai
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BENGALURU (Reuters) - Shares of India's top private-sector lender HDFC Bank Ltd fell almost 4% on Monday, dragging the Nifty private-sector bank index down, as investors sold off positions on worries that rising COVID-19 cases would hurt the asset quality of banks.

India on Monday reported its tenth record daily increase in coronavirus cases in eleven days, with the capital city of New Delhi — currently under a weekend curfew — reporting a shortage in critical-care beds.

"Due to rising cases, lockdowns have been announced in some parts of the country, and this will have an impact on asset quality of the banks, resulting in higher NPAs," Anita Gandhi, a whole time director at Arihat Capital, said.

The state of Maharashtra, home to financial hub Mumbai and the bank's headquarters, has already imposed stringent curbs, effective April 15.

HDFC Bank over the weekend said its board had approved its proposal to raise 500 billion rupees in the next 12 months through a private placement, and added that the second wave of coronavirus infections, will continue to impact the bank's results.

Net non-performing assets came in at 0.40% during the quarter when measured against net advances, against 0.36% a year ago.

Shares of HDFC Bank dragged down the Nifty private banks index by over 4% on Monday morning.

(Reporting by Rama Venkat in Bengaluru; Editing by Shailesh Kuber)