Shares see volatility in Monday morning trading, mirroring financials, ahead of the Union budget. Select Adani Group stocks, however, break the recent downward trend after a short-seller attack on group companies caused a sell-off over the previous two sessions.
At 11:03 a.m. IST, the Nifty 50 index drops 0.36% to 17,540.65, while the S&P BSE Sensex experiences a 0.29% decrease to 59,156.62. The indexes alternate between gains of 0.6% and losses of 0.9%, in line with the intraday trajectory of high-weightage financials, which have a 0.53% drop as of 11:03 a.m. IST. Financials, in the previous two sessions, dragged down the index.
Equities experience a drop to a three-month low on Friday, dragged down by a short-seller attack on Adani group companies, causing a selloff in banks. Today, the group faces a critical session as the secondary share sale of the flagship Adani Enterprises sees only a 1% subscription on Friday.
“The markets will remain highly volatile ahead of the budget,” warns Aishvarya Dadheech, Director and Fund Manager at Ambit Asset Management. Analysts also attribute the fears of a drawdown in financials to the scathing report by Hindenburg Research that raises concerns about the books of Adani companies.
Adani Enterprises rises as much as 10%, before trimming gains to a 2.64% advance, becoming one of the top Nifty 50 gainers. Adani Ports, on the other hand, reverses its climb. ACC and Ambuja Cements trim their earlier gains in the session to trade up slightly.
Out of the Nifty 50 constituents, 21 see an advance while 29 experience a decline. Bajaj Finance shares see a nearly 5% rise to reach a four-month high of 6,040 rupees, following its third quarter earnings surpassing estimates.
Foreign institutional investors sell 83.72 billion rupees ($1.03 billion) worth of shares in the last two sessions, since Hindenburg’s report.
Investors turn their attention to India’s Union budget on Feb. 1, closely monitoring the government’s fiscal consolidation path and borrowing calendar for fiscal 2024.
In addition to the Union budget, analysts also indicate that rate decisions by global central banks and January’s automobile sales data will play a key role in shaping the market mood.