Stock market today: Adani Enterprises fell 3 per cent, Adani Energy Solutions fell 9 per cent, and Adani Power declined 8 per cent.
Sensex and Nifty climbed over 1 per cent each today but slipped into the red after witnessing heavy selling pressure. Stocks initially gained as Prime Minister Narendra Modi-led NDA is seen assuming office for the third time. However, defence stocks tanked and some Adani stocks dipped. Sensex climbed 1.31 per cent and breached the 73,000 mark before erasing entire gains, while Nifty breached the 20,000 mark amid volatility.
Among defence stocks, Bharat Dynamics fell 10 per cent to 1,293.35, Cochin Shipyard fell 10 per cent, NBCC 9.48 per cent, HUDCO 7.58 per cent, and MIDHANI 6.76 per cent. Other stocks that fell over 5 per cent included Engineers India, IRCON International, Indian Bank, REC, RVNL, Hindustan Aeronautics, BHEL, and Oil India.
Among Adani Group stocks, Adani Enterprises fell 3 per cent, Adani Energy Solutions fell 9 per cent, and Adani Power declined 8 per cent. Adani Ports and Adani Total Gas also fell 2-3 per cent.
Stock Market: Recovery Amidst Election Fallout
Brokerage firms said the stock market was not prepared for the election outcome. UBS noted that Indian market valuations are expensive despite ordinary corporate earnings growth outlook. Morgan Stanley mentioned that unresolvable disagreements within the NDA coalition are not priced in by the stock market as the BJP fell short of a majority in Parliament (272 seats).
In a turnaround from the previous day’s steep losses, the Indian stock market opened positively this Wednesday. Despite mixed global cues, the market showed resilience, providing relief to investors rattled by the Lok Sabha election results announced on June 4.
The benchmark indices displayed recovery, with the Sensex surging by 670.21 points, or 0.93%, to reach 72,749.26, while the Nifty climbed by 209.00 points, or 0.96%, to settle at 22,093.50. The market breadth was encouraging, with 1,714 shares advancing, 678 shares declining, and 95 shares remaining unchanged.
On the Nifty, prominent gainers included ONGC, Mahindra & Mahindra (M&M), Bharat Petroleum Corporation Limited (BPCL), Hindustan Unilever Limited (HUL), and Tata Steel. Conversely, Hindalco, Larsen & Toubro (L&T), Power Grid Corporation, Axis Bank, and Apollo Hospitals emerged as the top losers. The significant decline in Hindalco’s shares, down by 5%, was due to Novelis Inc.’s decision to postpone its initial public offering (IPO) due to unfavorable market conditions. This announcement led to a sell-off in Hindalco, as Novelis is a key subsidiary.
The Indian Rupee opened marginally higher at 83.46 per US Dollar compared to the previous close of 83.52, signaling a slight improvement in investor confidence. Aditya Gaggar, Director of Progressive Shares, commented on the market dynamics: “Yesterday’s hammering caused the biggest drop in the Indian markets since March 2020, with Nifty50 ending the session at 21,885. The Index has formed a massive red candle on the daily chart, indicating extreme pessimism. However, today’s moderate opening aligns with the GIFT Nifty indication, suggesting immediate support at 21,600 and a strong hurdle at 22,500. The short-term trend across sectors has turned bearish, but this correction presents an opportunity for long-term investors to deploy 5-10% of their capital.”
The massive sell-off on June 4, a reaction to the Lok Sabha election results, was driven by the ruling Bharatiya Janata Party (BJP) failing to secure a clear majority, contrary to exit poll predictions. Despite this, the BJP-led National Democratic Alliance (NDA) managed a slim majority, enabling Prime Minister Narendra Modi to return for a historic third consecutive term. The NDA won approximately 295 seats, just above the 272 needed to form the government.
You might also be interested in – Rs 1.4 lakh crore gain! Adani stocks soar up to 16% as exit polls forecast Modi’s return
