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Indian equities were under pressure due to a combination of factors; Know key factors here
Why is market down today?
Benchmark indices Sensex and Nifty fell by 1 per cent in today’s intraday trade, weighed down by a sharp sell-off in Adani group stocks, escalating geopolitical tensions, and continued foreign institutional investor (FII) outflows.
The BSE Sensex opened at 77,711.11 and dropped over 900 points, reaching an intraday low of 76,802.73. By around 12:35 pm, it showed a slight recovery, trading at 77,127.42. Meanwhile, the NSE Nifty fell by 179.75 points, settling at 23,338.75 during early trading.
Indian equities were under pressure due to a combination of factors, with the indictment of billionaire Gautam Adani in a bribery case by the US Securities and Exchange Commission (SEC) being a key trigger. Additionally, escalating tensions in the Russia-Ukraine conflict and a general sense of weakness across global markets further weighed on investor sentiment.
Market analysts are also watching the state assembly election results closely. Manish Chowdhury, Head of Research at StoxBox, noted, “Given the current market nervousness, influenced by recent global geopolitical developments and the fresh Adani bribery case, an unfavorable outcome for the ruling Maharashtra government could further dampen market sentiment.”
Reasons Behind the Market Decline
The Adani Factor
On Wednesday, US authorities revealed that Adani and seven other individuals, including his nephew Sagar Adani, allegedly paid around $265 million in bribes to Indian government officials to secure contracts projected to generate $2 billion in profits over 20 years, including the development of India’s largest solar power plant.
This news caused Adani Group stocks to tumble by up to 20 per cent in intraday trade, with shares of Adani Energy Solutions, Adani Enterprises, Adani Ports, ACC, and Ambuja Cements hitting their respective lower circuit limits. Other Adani Group companies such as Adani Green Energy, Adani Total Gas, Adani Power, NDTV, and Adani Wilmar also saw declines ranging from 10 per cent to 20 per cent.
Rising Geopolitical Tension
The escalating Russia-Ukraine conflict also added to market unease. Ukraine’s use of Storm Shadow missiles supplied by the UK, along with Russia’s recent changes to its nuclear doctrine, have fueled investor uncertainty.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, remarked, “The heightened tensions in the Russia-Ukraine war are likely to weigh on market sentiment. The growing uncertainty may prompt market participants to adopt a wait-and-watch approach.”
Foreign Investor Outflows
Data from November 18 showed a slowdown in FII selling, with domestic institutional investors (DIIs) continuing their buying spree. However, FII outflows surged again on November 19, reaching Rs 3,411.73 crore, further dampening market sentiment.
Weak trends in Asian markets also contributed to the decline in India, with Nvidia’s revenue figures falling short of expectations after the US market closed. Among Asian markets, Tokyo, Shanghai, and Hong Kong saw declines, while Seoul remained in the positive territory.
Technical Outlook
According to technical analysts, the key support level for Nifty is at 23,588. If the index stays above this level, it may see a rally towards 23,711, 23,904, or 24,027. However, a drop below 23,588 could trigger profit-taking, potentially leading to a correction towards levels of 23,395, 23,272, or 23,079, analysts at Axis Securities noted.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
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