Sensex, Nifty Crash: Broad-based selling in key indices alongside selloffs in heavyweights like Adani Group stocks, Reliance Industries, Hindustan Unilever and ITC among others, dragged Sensex and Nifty to below 77,000 and 23,300 during the trading hours of November 21, 2024. Adani Group stocks after billionaire Gautam Adani was roped into allegations of bribery and fraud in the USA, will be in focus even on Friday. However, the quantum of Adani stocks on benchmarks will be keenly watched on November 22.

In the closing bell of Thursday, the Indian stock market made some recovery including a slowdown in selling Adani stocks. Sensex dipped 423 points to close at 77,156 and the Nifty dropped 169 points to 23,350, marking a five-month low for the latter.

Indices like metal, oil & gas, media, PSU banks, PSU stocks, and FMCG stocks were top bears on November 21. Adani Ports, NTPC, SBI, ITC, and Asian Paints were the top losers on Sensex, while Power Grid, Ultratech Cement, TCS, HCL Tech, and Kotak Bank emerged as the top gainers of the day.

After the closing bell of November 21, Adani Group’s flagship company, Adani Enterprises shed nearly 23%, followed by 20% and 10% lower circuit in Adani Energy Solutions and Adani Wilmar share price. Adani Ports closed lower by 13.5%, while Adani Green Energy shares dipped by 18.80%, Adani Power shed 9.15%, Adani Total Gas declined by 10.40%, while cement stocks like ACC and Ambuja Cements fell by 7.3% and 11.98% respectively.

Will Sensex and Nifty Crash On Friday, November 22 As Well? And How Much Adani Stocks Could Impact?

Experts believe the selling pressure in Adani stocks will continue temporarily, however, it is the macro factors that will play a key role in guiding sentiments on BSE and NSE.

Explaining why the market fell on November 21, Siddhartha Khemka, Head – Research, Wealth Management, Motilal Oswal Financial Services said, the market witnessed a broad-based selloff with Nifty trading in the negative territory throughout the day and closing with a loss of 0.7% at 23,350 on the back of heightened geo-political tension between Russia and Ukraine. Further adding to the pressure, the Adani Group faced renewed scrutiny as US prosecutors have charged founder Gautam Adani with participating in an alleged $250 million bribery scheme to secure solar energy contracts in India. Several banking stocks came under heavy selling pressure as investor concerns grew over their exposure to Adani Group companies.

What To Expect on Friday? Khemka believes macro and sector-specific performance will influence trends in the stock market.

Khemka added, “We expect positive for telecom companies as the Supreme Court ruled in their favour, granting them the right to claim tax credits on duties paid for infrastructure components like tower parts and green shelters. The foreign portfolio investors have been relentlessly selling Indian equities with nearly 35000 crore outflow in November month till date, which has been among the key reasons behind the recent market downtrend.”

Motilal analyst further said, “Markets are likely to react to the preliminary release of November month manufacturing and services PMI of US, Europe and India tomorrow. In the near term, we expect the market to remain volatile on account of global geo-political concerns, relentless FII selling and uncertainty around the outcome of state assembly elections in Maharashtra and Jharkhand.”

Vinod Nair, Head of Research, at Geojit Financial Services said, “The fresh Adani case with the US DoJ added to the market’s woes. Although there were signs of a slowdown in FII selling, it surged again, adversely affecting market sentiment particularly the financial sector. We expect an improvement in the trend when global & domestic political issues stabilise.”

Giving a technical view, Shrikant Chouhan, Head of Equity Research, at Kotak Securities said, We are of the view that, the current market texture is weak but oversold hence strong possibility of one quick pullback rally is not ruled out. For the traders now, 23350/77150 and 23400/77300 would be the key levels. Above 23400/77300, we could see one quick pullback rally till 23500-23550/77700-78000.On the flip side, fresh selloff is possible only after dismissal 23250/76900. Below this, the selling pressure is likely to accelerate. Below the same market could slip till 23175-23150/76600-76500.”

Additionally, Gaurav Garg, Research Analyst at Lemonn Markets Desk said, that Bank Nifty has traded below the key 50000 level in the morning led by losses in PSU banks linked to Adani Group exposure. However, it has managed to close above the 50,000 mark after recovery towards the close. Overall, sentiment remains fragile with 50,000 remaining the key support level to watch.

For benchmark Nifty, Garg added that the market slipped below the 23300 level initially but rebounded to close around 23350. Sentiment remains weak with immediate support levels to watch at 23300.

From a macro data perspective, Garg said, bank loan and deposit growth data have largely come along the expected lines. RBI in its monthly bulletin indicated that economic growth was expected to pick up in the current quarter after a slowdown in July-September, helped by a rebound in private consumption during the festive period. Investors’ focus will be on the flash PMI surveys along with global developments like Russia Ukraine and the Middle East.

To investors, Ajit Mishra – SVP, Research, Religare Broking said, “The broader indices are also under pressure but are currently finding support near their long-term moving average, the 200-day exponential moving average (DEMA). Traders are advised to adopt a cautious stance and prioritize a hedged approach to navigate the current market conditions.”

Story first published: Thursday, November 21, 2024, 23:19 [IST]