Sensex, Nifty Tumble Amid Sharp Fall in Adani Group Stocks and Foreign Fund Outflows
Indian equity markets faced a rough start on Thursday, with benchmark indices Sensex and Nifty witnessing significant declines in early trade. This drop was driven by a sharp sell-off in Adani Group stocks, ongoing foreign fund outflows, and weak trends in Asian markets.
Mumbai: Indian equity markets faced a rough start on Thursday, with benchmark indices Sensex and Nifty witnessing significant declines in early trade. This drop was driven by a sharp sell-off in Adani Group stocks, ongoing foreign fund outflows, and weak trends in Asian markets.
The BSE Sensex plunged 468.17 points to 77,110.21, while the NSE Nifty dropped 179.75 points to 23,338.75 during initial trading hours.
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Adani Group Stocks Under Pressure
The market downturn was heavily influenced by a steep fall in Adani Group stocks following news of legal charges against billionaire Gautam Adani in the U.S.
- Adani Ports: Tumbled 10% in early trade, reacting sharply to allegations of a $250 million bribery scheme involving Indian officials for securing favorable terms in solar power contracts.
- Adani Enterprises, Adani Green Energy, and Adani Energy Solutions: These stocks also witnessed significant losses, dragging the broader markets lower.
The allegations have escalated scrutiny on the conglomerate, affecting investor sentiment not only for the Adani Group but also for the broader market.
Also Read: Gautam Adani Faces U.S. Charges Over Alleged $250 Million Bribery Scheme
Other Laggards on Sensex and Nifty
Several non-Adani stocks also contributed to the market decline:
- State Bank of India (SBI): Declined amid concerns over exposure to Adani Group projects.
- IndusInd Bank, NTPC, and Tata Motors: These stocks were among the top laggards during early trade.
Gainers Amid Market Chaos
Despite the overall bearish sentiment, a few stocks managed to post gains:
- Infosys, HCL Technologies, Tata Consultancy Services (TCS), and Tech Mahindra: The IT sector stocks emerged as top gainers, likely driven by favorable trends in global technology markets and a weaker rupee supporting export-oriented businesses.
Foreign Fund Outflows Weighing on Markets
Foreign Institutional Investors (FIIs) continued their selling spree, offloading equities worth ₹3,411.73 crore on Tuesday, as per exchange data. The unabated outflows reflect concerns over global economic uncertainty, geopolitical risks, and rising scrutiny of Indian corporates.
Global Market Trends Impacting Indian Equities
Weak cues from Asian markets further weighed on Indian stocks:
- Tokyo, Shanghai, and Hong Kong: These markets traded lower, reflecting a cautious sentiment.
- Seoul: Stood out as an exception, posting gains during the session.
- U.S. Markets: Ended mostly in the positive territory overnight, offering some relief but failing to offset concerns stemming from local developments.
Oil Prices on the Rise
Global oil benchmark Brent crude climbed 0.25% to $72.99 per barrel, adding to inflationary pressures and raising concerns about its impact on the Indian economy.
Recent Market Performance and Background
The Indian markets had shown signs of recovery earlier in the week:
- Sensex on Tuesday: Snapped a four-day losing streak, rising 239.37 points (0.31%) to close at 77,578.38.
- Nifty on Tuesday: Rebounded after a seven-day decline, gaining 64.70 points (0.28%) to settle at 23,518.50.
However, the ongoing legal troubles for the Adani Group and broader global uncertainties have once again pushed the indices into negative territory.
What’s Driving Market Volatility?
- Adani Group’s Legal Troubles: The charges against Gautam Adani in the U.S. have sent shockwaves across Indian markets, with significant implications for investor confidence.
- Foreign Fund Outflows: Continued selling by FIIs is weighing heavily on equity markets.
- Weak Global Cues: Concerns over economic slowdown and geopolitical risks are keeping Asian markets under pressure.
- Oil Price Fluctuations: Rising crude oil prices add to inflation concerns, impacting market sentiment.
Outlook for Investors
- Short-Term Impact: Market volatility is expected to persist as investors digest developments related to the Adani Group and monitor global economic trends.
- Sectoral Focus: While Adani Group stocks and banks may remain under pressure, IT and technology stocks could offer resilience, supported by global trends and export potential.
- Long-Term Perspective: Investors are advised to focus on fundamentally strong stocks and diversify portfolios to mitigate risks amid heightened uncertainties.
Conclusion: A Volatile Start to the Trading Day
The sharp decline in Sensex and Nifty on Thursday underscores the fragility of Indian equity markets amid domestic controversies and global challenges. The Adani Group’s legal troubles, coupled with foreign fund outflows and weak Asian market trends, are likely to dominate market movements in the coming sessions.
Investors are advised to stay vigilant, monitor developments closely, and adopt a cautious approach to navigate the ongoing volatility.
For more updates on market trends, stock performance, and global cues, stay tuned to our platform.
