Indian benchmark indices opened lower on Thursday following the Maharashtra election exit polls, wherein BJP-led ‘Mahayuti’ alliance is signalled to get a clear majority. On the other hand, Gautam Adani led Adani Group stocks tumbled up to 18% in the early trade.
According to the latest exit poll trends, the ruling Mahayuti alliance is predicted to be on track to retaining power in Maharashtra, with the opposition Maha Vikas Aghadi (MVA) also putting up a strong challenge in the state’s assembly elections. Multiple exit polls released on Wednesday after polling concluded for the 288 seats, predicted the majority for the Mahayuti.
Adani Group stocks namely Adani Energy Solutions, Adani Power, Adani Enterprises, Adani Green Energy, Ambuja Cements, ACC and Adani Total Gas crashed up to 20 per cent for the day after US prosecutors indicted billionaire Gautam Adani and seven other senior business executives in connection with an alleged $250 million bribery scheme.
“The escalation of tensions in the Ukraine-Russia war can weigh on markets. The element of uncertainty caused by the escalations is high and therefore most market participants are likely to be in a wait and watch mode, said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Sectors to watch are hotels, aviation, banking, telecom, IT and pharma which are doing well. FMCG, cement, petroleum refining and metals are weak, he said.
Hardik Matalia, Derivative Analyst at Choice Broking said that foreign institutional investors (FIIs) extended their selling as they sold equities of Rs 3,411 crore worth on November 19, while domestic institutional investors purchased equities of Rs 2,783.89 crore on the same day. Indian stock markets witnessed significant volatility, he said.
Market analysts, based on the technical parameters, suggest investors sell the rise in the Nifty50 Index, amid the weekly expiry of futures and options (F&O) contract for the index. They believe that the Nifty’s movement reflects that bears are firmly in control, using every rebound as an opportunity to short.
Nifty formed a long bear candle on Monday in a continuation sign of the downside momentum. Nifty moved below the previous bottom of 24753, said Deepak Jasani, Head of Retail Research at HDFC Securities. “The trend of the Nifty remains weak and sell-on-rise behaviour may be witnessed for some more time, a bounce can be expected any time,” he said.
Sectoral trends remained mixed, with realty, auto, and pharma leading the gainers, while metal and energy ended in the red. Broader indices outperformed amidst the choppiness, closing with gains of nearly half a percent each, said Ajit Mishra, SVP- Research at Religare Broking. “We maintain ‘sell on rise’ stance for the index until a decisive reversal is evident,” he said.
The 200-DMA has now become a critical support for the index, as momentum indicator on the intraday chart, reaches to an oversold level, said Dhupesh Dhameja, Derivatives Analyst at SAMCO Securities. “Traders may consider a “sell on rise” strategy as long as the index trades below the immediate resistance at 24,000,” he said.
Nifty has witnessed pullback from its support range, and we could expect some positive momentum to continue to near to 24,000 levels over the next few days, said Vikas Jain, Head of Research at Reliance Securities. “It has made a higher bottom on the daily charts with positive momentum in broader markets indicating the pullback to continue” it said.
The nifty however, generated a Bollinger bands-based bullish setup – the first such occurrence since early August which had then triggered a rally, said Akshay Chinchalkar, Head of Research at Axis Securities. “However, this signal will be valid only as long as Tuesday’s high breaks with support at 23,350 holding. Any breakdown will bring the focus near 23,200 next,” he adds.
