Sensex, Nifty erase early gains; Adani Group stocks tank up to 10%, BPCL rallies 4%

Domestic equity markets slipped in the negative territory after a positive opening on Tuesday. Sharp selling selects heavyweight sectors and weak global cues weighed on the market's sentiments, wiping out the early gains. Sharp selling in Adani Group counter added pressure further.

Traders will be keenly awaiting the Union Budget announcement, scheduled on Wednesday. For today, Economic survey will outline the financial health of the country, guiding the move of the markets. At the global level, US Fed's interest rate hike announcement will keep the traders hooked to the edges.

At 9.20 am, the 30-share pack BSE Sensex was trading 192.44 points or 0.32 per cent lower at 59,307.92. NSE's Nifty50 index was trading 15.95 points or 0.09 per cent up at 17,620.30 at the same time. BSE midcap index was trading lower, whereas smallcap index was trading marginally up. Fear gauge India VIX spiked over 3 per cent to 18.26-level.

"We expect volatility to remain high ahead of key event of the Union Budget coupled with US Fed meet wherein strong support is placed in the range of 17500-17300, as it is confluence of key long-term moving averages like 200 days EMA and 52 weeks EMA," said ICICIDirect Research.

Meanwhile, stochastic oscillator is poised at oversold territory, indicating possibility of pullback cannot be ruled out. Thus, extended correction from hereon should be capitalized on to accumulate quality stocks in a staggered manner, it said.

Adani Group stocks hogged limelight once again. Cash stocks of Gautam Adani led conglomerate hit lower circuits once again. Adani Total Gas, Adani Green and Adani Transmission lost up to 10 per cent each, whereas Adani Power and Adani Wilmar dropped 5 per cent, their lower circuit limit.

On a sectoral front, Nifty metal index rose about a per cent, followed by some buying in PSU lenders and auto counters. However, all other sectors were trading in red, led by sharp selling in IT counters. Pharma stock also dropped a per cent, whereas realty and private lenders weakened further.

Bharat Petroleum jumped over 4 per cent to top the gainers among Nifty50 counters. Adani Entertainment and JSW Steel gained 2 per cent each, whereas UPL, ONGC, Adani Ports, Power Grid Corp, Grasim and State Bank of India were among the other key gainers.

On the downside, Tech Mahindra dropped 3 per cent after muted Q3 numbers. Larsen & Toubro, TCS and Cipla were other top laggards. Sun Pharma was also down a per cent ahead of the December quarter earnings scheduled later in the day.

The Budget tomorrow and the Fed decision on interest rates by evening tomorrow will have a big impact on markets. A positive, as we go into the Budget, is that instead of the usual pre-Budget rally on expectations, this time we had a market correction triggered by the Adani crisis, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

:If there are no negative surprises in the Budget and the Fed commentary is not hawkish, there can be a post-Budget rally in the market. The Adani crisis which had impacted market sentiments will be pushed to the back burner if the FPO sails through via institutional investment, he said.

In the broader markets, Mangalore Chemical and Fertilizers zoomed 12 per cent after strong quarterly results in Q3FY23, whereas ADF Foods gained 8 per cent. Mazagaon Dock, Trident and Spandana Sphoorty jumped 5-6 per cent each. Paradeep Phosphates, Data Patterns and SRF added up to 4 per cent in the early trade.

On the downside, Astec Lifesciences plunged 12 per cent after its December quarter results disappointed the street, whereas Heranba Industries extended its fall with another 11 per cent cut after a flop show in Q3. Greenpanel Industries, Sigachi Industries and Patanjali Foods were down 6-7 per cent each.
 

Also read: Adani Enterprises shares jump 5% after IHC investment; Adani Total, Adani Green, Adani Wilmar extend fall

Also read: Q3 results previews: KPIT Tech, Jindal Steel, Sun Pharma and ACC