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Informist, Wednesday, Nov. 27, 2024

By Anjana Therese Antony

MUMBAI – Gains in shares of banks, financial services, and Adani group companies helped benchmark indices to close slightly higher Wednesday. The market moved in a thin band, in line with expectations, in the absence of major triggers in domestic and global markets. The market capitalisation of Adani group companies increased by more than INR 1 trillion on Wednesday after Adani Green Energy said Chairman Gautam Adani and some other officials have not been charged with violations of the US Foreign Corrupt Practices Act. 

Adani group companies had lost over INR 2 trillion in market capitalisation on Thursday after the group officials were indicted by a US court. In an exchange filing, Adani Green Energy said the court documents on the criminal indictment and the civil complaint filed against group Chairperson Gautam Adani and seven others, do not indicate the quantum of the fine or penalty. 

Shares of the conglomerate's flagship companies, Adani Enterprises and Adani Ports and Special Economic Zone closed 11.5% and 6.3% higher, respectively. The two companies together gained INR 439 billion in market capitalisation on Wednesday. Gains in these two stocks together contributed to a 0.1% rise in the Nifty 50, which closed 0.3% higher at 24274.90 points. The BSE Sensex also ended 0.3% higher at 80234.08 points.

Despite the rise in benchmark indices on Wednesday, the near-term sentiment remains weak, analysts said. "The delay in rate cuts in India and the US, along with other negative factors such as geopolitical conflicts, FII selling, earnings estimate cuts, expectation of lesser returns, are some of the factors keeping the market weak," an equity strategist at a domestic broking firm said. Benchmark indices have fallen around 6% each from their all-time highs hit in September. India saw record outflows to China and the US since early October, particularly due to slowdown in earnings growth, expensive valuations, aggravated geopolitical tension between Russia and Ukraine and Israel and Iran, and the depreciation of the domestic currency. However, FIIs turned net buyers in the previous two sessions after being net sellers for almost two months. FIIs have net purchased shares aggregating to more than INR 111 billion in the last two days.

The near-term support for the 50-stock index is pegged at 24100-24000 points and resistance at 24350-24400 points, technical and derivatives analysts said. The index is most likely to trade sideways until it breaches 24500 on the higher side, Vipin Kumar, senior technical and derivatives analyst at Globe Capital Market, said.

Among the Adani group companies, Adani Green and Adani Energy Solutions hit upper circuits of 10% each, while Adani Total Gas and Adani Power ended nearly 20% higher each and Adani Wilmar closed over 8% higher. 

Meanwhile, Andhra Pradesh Finance Minister Payyavula Keshav told Informist that the state government will have to see all aspects of the issues related to the claims against the conglomerate before suspending power purchase agreements linked to the group entities, considering the legal and financial implications. 

Banks and financial services stocks were the top gainers Wednesday, contributing nearly 0.2% of the rise in the Nifty 50. HDFC Bank hit a record high of INR 1,817.35 on the National Stock Exchange Wednesday and gained INR 204.45 billion in market capitalisation. Analysts said the asset quality and profitability of major banks in India are improving and the medium-term outlook remains positive. The recent correction has brought valuations of some banks to comfortable levels, they said. 

Defence stocks also surged following the recent correction, strong order books and hopes of more orders from the government. Bharat Dynamics closed over 8% higher and Mazagon Dock Shipbuilders ended 5.6% higher. Among other gainers were Hindustan Aeronautics and Cochin Shipyard, which closed higher by 2.5% and 5%, respectively. According to reports, JP Morgan recently initiated coverage on some of these stocks and said India's defence sector presents the opportunity for structural and value-accretive growth due to increasing capital expenditure. 

Among specific stocks, Coal India rose after reports said Morgan Stanley initiated coverage on the stock with an 'overweight' rating and a target price of INR 525. It said the company would be a key beneficiary of the rise in power demand and that the strong balance sheet is seen to support investments.

Strong earnings growth and bullish views from various broking firms pushed Siemens to a one-month high of INR 7,622.95. Some broking firms raised their target prices on the stock while retaining the 'buy' rating. Prabhudas Lilladher said it is bullish on the stock due to the company's strong and diversified presence across industries, product localisation, strong balance sheet, healthy public and private capital expenditure, and value unlocking from the demerger of its energy business.

On new listings, NTPC Green Energy closed 12.6% higher at INR 121.65 after debuting at INR 111.50 on Wednesday. 

* Of the Nifty 50 stocks, 26 rose and 24 fell

* Of the Sensex stocks, 18 rose and 12 fell

* On the NSE, 1,902 stocks rose, 874 fell, and 92 were unchanged

* On the BSE, 2,593 stocks rose, 1,338 fell, and 109 were unchanged

* Nifty Energy: up 1.5%; Nifty Metal: up 0.8%; Nifty Pharma: down 0.6%

BSE                                               NSE

Sensex: 80234.08, up 230.02 points or 0.3%        Nifty 50: 24274.90, up 80.40 points or 0.3%

End

Edited by Saji George Titus

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