The market opened higher on Monday, but liquidation in the positions of Adani Group of companies triggered massive selling and dragged Nifty to the level of 15606. Later, the markets witnessed a gradual recovery which pulled the market back to the highest level of the day. It was completely unexpected to recapture the levels of 15800 but gains in Reliance, Infosys and Bajaj Finance made it possible, said Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities Ltd.
The formation of the market is suggesting a bullish continuation, however, for that the market would consolidate between the levels of 15850 and 15700. Once the market starts trading and sustaining above the levels of 15850 then it would not be difficult for the market to conquer the levels of 16000/16050. Buying is advisable if the market drops to 15700/15720 levels. The Bank-Nifty has formed a Dragonfly Doji, which is bullish for the sector and for the market.
After making a weak opening led by broad based sell-off, Indian equity bourses witnessed gradual recovery and managed to settle marginally higher. Strong gains in stocks like Reliance and Infosys offset the losses of private banks and Adani port, said an analyst. Adani group stocks plunged on media reports that three FPI accounts were frozen by NSDL. However, in late session Adani group issued clarification and denied depository freeze. All the sectoral indices closed on a negative note except Nifty IT, FMCG and PSU Bank. Broader market indices underperformed to the key benchmark while India VIX settled 4% higher. On stock specific, Divis Lab, Tata Motors and Reliance were the top gainers while Kotak Bank, Coal India and Adani Ports remained as the top laggards. Going ahead investors will keep a close eye on India’s inflation data, US Monetary policy decision and China factory output data.
Gautam Adani-led Adani Group witnessed deep cuts on 14th June on report that Indian depository has frozen three Mauritius based funds owning Adani group stake worth Rs 435bn.
Ankit Pareek, Research Analyst, Choice Broking, said, stock-specifically, Adani Power stock remained under investors’ buying radar in the past week as company is focusing on green energy and partial payment received from state government which will help Adani power to reduce debt. Sentiments were also buoyed over expectations of business revival with economy unlocking. Adani Railway was among the bidder for CST redevelopment which further cheered investors’ sentiments. Adani Ports share price soared on the back of higher operational performance during May month. Overall group stocks also got strong support after getting three of its stocks (Adani Enterprises, Adani Total Gas and Adani Transmission) included in MSCI India index last month, taking the total group count to five.