Here's why Sensex crashed 902 pts from day's high, Nifty below 23,300 today

After starting the day on a positive note, the BSE’s 30-stock bluechip index dropped 902 points or 1.16 per cent at 76,802.73, from its day’s high of 77,711.11 on Thursday. In contrast, the NSE’s Nifty50 started the day in the negative territory and further fell 255 points or 1.08 per cent at 23,263 level from its previous close of 23,518 level. 

 

Indian equities were under pressure again on Thursday owing to a confluence of factors led by billionaire Gautam Adani’s indictment in a bribery case by US Securities and Exchange Commission (SEC). Further the latest escalations in the Russia-Ukraine war and finally a weak sentiment across global markets also weighed on the Indian market. 

 

US authorities on Wednesday said that Adani and seven other defendants, including his nephew Sagar Adani, agreed to pay about $265 million in bribes to Indian government officials to obtain contracts expected to yield $2 billion of profit over 20 years, and develop India's largest solar power plant project.

 

Also Read: US SEC charges Gautam Adani, 7 others in alleged bribery, fraud scheme

 

In reaction Adani Group stocks fell up to 20 per cent in intraday trade, with shares of Adani Energy Solutions (20 per cent at Rs 697.70), Adani Enterprises (10 per cent at Rs 2,538.20), Adani Ports and Special Economic Zone (10 per cent at Rs 1,160.15), ACC (10 per cent at Rs 1,966.65) and Ambuja Cements (10 per cent at Rs 494.65) locked at their respective lower circuits on the BSE at 09:16 AM.

 

Moreover, Adani Green Energy, Adani Total Gas, Adani Power, New Delhi Television (NDTV), Adani Wilmar and Sanghi Industries among other Adani Group stocks declined in the range of 10 per cent to 20 per cent in intra-day trades. Read more

 

Meanwhile, the index heavyweights that pulled the BSE Sensex down on Thursday in terms of contribution included State Bank of India contributing 120 points. Other heavyweights included Adani Ports (82 points), Reliance Industries (75 points), ITC (65 points) and ICICI Bank (54 points). 

 

21 out of 30 stocks were in the red territory on the BSE Sensex with Adani Ports being the top loser, falling up to 10 per cent intraday and was followed by SBI (down 4.3 per cent), IndusInd Bank (down 2.8 per cent), NTPC (down 2.7 per cent) and ITC (down 1.9 per cent)

 

Among sectoral trends, all sectors were trading in red except Nifty IT (up 0.50 per cent). The ones under severe stress included Nifty PSU Bank falling up to 4.26 per cent, followed by Nifty Metal, down 2.15 per cent, and Nifty Oil and Gas, falling 2 per cent. Others such as Nifty FMCG, Nifty Bank, nifty Media and Nifty Consumer Durables also fell around 1-2 per cent each in intraday deals.   Also Read: SEC charges Adani in $265 mn bribery scandal

 

The broader markets were also feeling selling pressure with the BSE SmallCap index down 1.41 per cent at 51,750.03 level intraday, while the BSE MidCap index fell 1.30 per cent at 44,050.21intraday.

 

According to analysts, the uncertainty after the recent escalation in Ukraine-Russia war is a possible scare for the 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. However, any sharp slide in the market appears unlikely since the mother market US has largely downplayed the escalation,” said Dr V K Vijayakumar, chief investment strategist, Geojit Financial Services

 

Technical View

As per technical analysts, the trend-deciding level for the day is 23588. If Nifty trades above this level, the index may witness a further rally up to 23,711-23,904-24,027 levels. 

 

“However, if the index  trades below 23,588 levels, we may witness the initiation of some profit booking in the market, and it may correct up to 23395-23272-23079 levels,” said analysts at Axis Securities. 

 

Global markets

The downturn in the Indian market came amid a similar show in the Asia-Pacific markets with Japan's Nikkei 225 trading 0.92 per cent lower, while the broad based Topix index was down 0.53 per cent.

 

Australia's S&P/ASX 200 fell 0.16 per cent. Hong Kong’s Hang Seng index slipped 0.13 per cent. In contrast, South Korea’s Kospi surged 0.53 per cent and the Kosdaq rose 0.20 per cent.

 

Overnight in the US, the S&P 500 ended Wednesday flat, with Nvidia shares slipping nearly 1 per cent ahead of its highly anticipated earnings report. The Nasdaq Composite dipped 0.11 per cent, while the Dow Jones Industrial Average gained 0.32 per cent.