Nifty, Sensex tumble as Adani bribery case, weak global cues jolt investors; IT stocks buck trend

Adani stocks were in focus, crashing up to 20 percent, after Gautam Adani and seven others were indicted in a New York federal court on charges of bribery and fraud. Authorities allege that Adani and the other defendants paid over $250 million in bribes to Indian government officials to secure solar energy supply contracts, generating profits exceeding $2 billion. The flagship firm Adani Enterprises tumbled 10 percent in opening trade.

Also read: Adani scraps $600 million bond, other notes drop on US charges: Bloomberg

"Near-term upside seems to be capped due to a lack of positive triggers and sharp selling from foreign institutional investors (FIIs), Karkera added, suggesting that volatility is likely to persist and markets are expected to move sideways.

FIIs sold Rs 3,411 crore in cash markets during the previous trading session, taking their selling to over Rs 34,000 crore since the start of November. Domestic institutional investors have bought every dip but that hasn't been able to lift the markets higher.

Read more: GQG Partners to review Adani Group holdings after US charges against Gautam Adani

Of the 13 sectoral indices, Nifty IT and Realty were the sole gainers, rising up to a percent. Tech Mahindra, HCL Tech, TCS and Infosys lifted the index higher. Laggards included Nifty Energy, Infra, Auto and FMCG, falling up to 2 percent. Heavyweights like Adani Green, IOC, and Adani Power dragged the energy index lower. Auto stocks witnessed profit booking after majors like M&M, Maruti Suzuki, Tata Motors and Bajaj Auto traded in the negative.

Among other stocks, telecom major Bharti Airtel which traded higher, signed a multi-year, multi-billion deal with Nokia to deploy 4G and 5G equipment across key Indian cities and states. As per the contract, Nokia will deploy equipment from its 5G AirScale portfolio, including base stations and baseband units through its ReefShark System-on-Chip technology.

The share price of PSP Projects witnessed a sharp downtrend of 9 percent after Adani Infrastructure secured a deal to purchase a 30 percent stake in the construction firm. The agreement includes an open offer at Rs 642 per share, a 4 percent discount to the current market price, and involves purchasing a stake from one of PSP Projects' founders. This comes after Gautam Adani was charged for a $250 million bribery case by a New York Federat Court.

The broader market, comprising mid-small cap indices, mirrored overall market trends with losses of 0.2 and 0.3 percent, respectively. Karkera says that two are poised for a slight recovery in the near term as they are oversold at the current juncture.  "We expect buying from here on as the Q2 results were also better than expected," he added.

From a technical standpoint, "After a negative opening, Nifty can find support at 23,350 followed by 23,250 and 23,200. On the higher side, 23,600 can be immediate resistance, followed by 23,700 and 23,800," Hardik Matalia, Derivative Analyst at Choice Broking said. "The charts of Bank Nifty indicate that it may get support at 50,300 followed by 50,100 and 49,900. If the index advances further, 50,800 would be the initial key resistance, followed by 51,000 and 51,200," he added.

In the week ahead, all eyes will be on the Maharashtra State Election results, a key event that could shape political stability in the region. Experts believe that the state’s significance to the nation’s political and economic landscape makes these results pivotal, with any surprises likely to stir market volatility.

TCS, Hindalco, HDFC Bank, Trent and HCL Tech were the top gainers on the Nifty. SBI, Dr Reddy's, Britannia, NTPC, and Asian Paints were the laggards on the Nifty.

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