Sensex, Nifty rebound after early fall; Adani Stocks trade mixed, Bajaj Finance rise 4%

Domestic equity indices opened sharply lower on Monday but staged a quick recovery to trade flat. Mixed cues from the Adani Group stocks kept the traders on the tenterhooks ahead of much awaited event later this week including the Union Budget and US Fed's meeting.

Relentless selling by the foreign investors weighed on the market sentiments and offset the positive cues from the global markets. However, traders will be cautious amid the much-awaited major economic event, which will guide the markets in the near-term.

At 9.25 am, the 30-share pack BSE Sensex was trading 49.1 points or 0.08 per cent higher at 59,380. NSE's Nifty50 index was trading 15.95 points or 0.09 per cent up at 17,620.30 at the same time.

Broader markets outperformed the headline peers, as BSE smallcap index rose about a per cent, whereas BSE midcap index also posted decent gains. Fear gauge India VIX jumped more than 4 per cent to 18.08-level. All the sectors were trading firmly higher, led by big gains in PSU and metal counters.

"Continued FII’s selling pressure and nervousness ahead of Union Budget can be attributed to ongoing market weakness. At the same time, sharp declines in Adani group stocks have also led sentiments to deteriorate," said ICICIDirect Research.

"A move above 17,800 should be crucial for the recovery to continue. We will avoid bottom fishing in current volatility and believe sustainability above 17,800 should be important for regaining strength," it said.

Adani Group's F&O stocks were among the top performers. Adani Enterprises jumped 9 per cent, whereas Adani Ports gained 8 per cent. Ambuja Cements was locked in the upper circuit of 10 per cent, whereas ACC was trading 7 per cent higher in early trade.

In the cash segment, Adani Group shares were facing another bout of beating. Adani Total Gas was down 18 per cent, whereas Adani Green Energy plunged 15 per cent. Adani Transmission dwindled another 13 per cent, whereas Adani Power and Adani Wilmar were locked in seller's circuit of 5 per cent each.

Today the market will be completely dominated by the movements in Adani stocks. The statement from Adani Enterprises that the FPO is on schedule and that there is no change in the price band is hugely important. This can be interpreted as a reflection of the confidence of the management in the success of the FPO, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"It is important to understand that the stock has limited public float. So, the price crash on Friday happened mainly due to shorting Adani stocks in general and Adani Enterprises in particular. One possibility is a big short-squeeze in the stock. Huge volatility is in store in Adani stocks today. The sustained selling by FPIs in January with a massive sell figure of Rs 5978 crores last Friday is a bit intriguing," he said.

Among other Nifty50 stocks, Bajaj Finance rallied 4 per cent after upbeat quarterly performance. Bajaj Finserv, SBI and NTPC gained 2 per cent each. On the contrary, SBI Life topped the losers with a 3 per cent fall. It was followed by Power Grid and HUL which dropped 2 per cent each. Apollo Hospitals, Bharti Airtel and HDFC shed a per cent each.

In the broader market, Data Patterns zoomed 11 per cent after strong performance in the December 2022 quarter. Kiri Industries and AGI Greenpac jumped 9 per cent each. Seshasayee Ppaer, Power Mech, West Coat Paper, Unichem Labs and Easy Trip Planners rallied 5-7 per cent each.

On the downside, Heramba Industries plunged 20 per cent after disappointing results in the December 2022 quarter. Kajaria Ceramics shed 6 per cent, whereas Patanjali Foods hit lower circuit of 5 per cent. Dixon Technologies and Neuland Labs dropped 5 per cent each.

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Also read: Adani Enterprises shares rally 9% but Adani Total Gas, Adani Transmission, Adani Green tumble up to 20%