Sensex, Nifty fall sharply despite positive global cues; Adani Group shares under pressure

Domestic markets fell sharply on Friday despite positive global cues and a strong rally in the auto sector. One of the reasons behind the weakness is the free fall in shares of listed Adani Group companies.

Domestic markets have been dragged down by a sharp fall in shares of Adani Group companies. (Photo: Reuters)

By India Today Web Desk: Benchmark stock market indices opened sharply weaker on Thursday despite positive global cues in the wake of stronger-than-expected US economic growth data. However, sustained weakness in seven listed companies of Adani Group have weighed down market sentiments, leading to a sharp spike in volatility.

Moments after the opening bell, the S&P BSE Sensex was trading nearly 500 points lower, falling below the 60,000-mark. The NSE Nifty 50 also lost a fair share and traded below 17,800. Broader markets also reflected the weak sentiments as the Midcap and Smallcap indices traded lower.

Among the sectoral indices, Nifty Auto was the biggest gainer, rising nearly 2 per cent. But banks, financials, oil and gas and consumer durables saw major losses.

Shares of Tata Motors surged over 7 per cent in early trade after reporting healthy Q3 profits and was the biggest gainer in early trade. Bajaj Auto also gained over 5 per cent after reporting a strong Q3 profit of 23 per cent.

While auto stocks have arrested the freefall on Dalal Street, sentiments have taken a huge pounding due to the freefall in seven listed companies of Adani Group, which tanked sharply after a US short-seller’s report raised concerns about debt and levelled allegations of fraud.

Also Read | Adani Group shares fall after Hindenburg report. What we know so far

Adani Group strongly denied the allegation and even said it is evaluating legal action against US-based Hindenburg Research for releasing a “baseless” and “malicious” report on January 24, just days ahead of the Adani Enterprises FPO. It may be noted that the FPO opened for subscription today.

Shares of listed companies like Adani Enterprises, Adani Total Gas, Adani Transmission, Adani Green Energy, Adani Power, Adani Ports and SEZ and Adani Wilmar are down in the range of 2-16 per cent. Two cement companies owned by the group, ACC and Ambuja Cement, also fell today.

Investors have also turned cautious ahead of the Union Budget 2023, which will be presented by Finance Minister Nirmala Sitharaman on February 1.