Bloodbath On D-street After Carnage In Adani Group Stocks
Indian equities hit their three-month low on Friday as pressure on Adani Group stocks intensified post the Hindenburg Research Report. The selloff triggered on Friday wiped off investor wealth by Rs 6.8 lakh crore, with the total market capitalisation of BSE-listed stocks dropping to Rs 269.7 lakh crore.
The Nifty 50 index ended 1.61 per cent lower at 17,604.35, while the S&P BSE Sensex fell 1.45 per cent to 59,330.90.
“Following the release of a study report by Hindenburg Research on Adani Group, the Indian equities markets are under intense selling pressure as the stock market chaos continues in the Adani Group. The group has high debt, which is having a sentimental impact on the banking space; therefore, we are seeing a sharp selloff in banking stocks, especially in PSU names,” said Santosh Meena, Head of Research, Swastika Investmart.
Adani Group Stocks, including Adani Transmission and Adani Green Energy, tumbled 20 per cent each, while Adani Power slipped 5 per cent, with all three hitting their lower circuit.
On the Nifty50, Adani Enterprises and Adani Ports were the top drags, ending 18.5 per cent and 16.3 per cent lower, respectively.
Banking stocks were a drag on the Sensex, with State Bank of India, ICICI Bank, IndusInd Bank, Axis Bank, Kotak Mahindra Bank and HDFC Bank all ending in red, slipping between 1.5-5 per cent.
Banking stocks were under pressure due to exposure concerns raised by the report. However, Jefferies said that the exposure is within manageable limits.
Meanwhile, capital market regulator Securities and Exchange Board of India (Sebi) said that it would study the Hindenburg Research and add to its ongoing preliminary investigation into the group’s foreign portfolio investor, as per a report by news agency Reuters.
On the technical outlook, Amol Athawale, Deputy Vice President - Technical Research at Kotak Securities, said that a minor pullback rally is possible if Nifty trades above 17,650.
“On the flip side, selling pressure is likely to accelerate only after the dismissal of 17,550, and below the same, the index could slip till 17,400. An extended correction could drag the index till the 200-day SMA or 17,300,” said Athawale.
