The Indian equity benchmarks nosedived for second straight session on Friday with the S&P BSE Sensex crashing 1,116 points and Nifty 50 index dropping below its important psychological level of 17,600 amid broad-based selling pressure.
"Following the release of a study report by Hindenburg Research on Adani Group, the Indian equities markets are under intense selling pressure as the stock market chaos continues in the Adani Group. The group has high debt, which is having a sentimental impact on the banking space; therefore, we are seeing a sharp sell-off in banking stocks, especially in PSU names," Santosh Meena, head of research at Swastika Investmart.
"Bank Nifty has surrender its 100-DMA of 41,500, which led to multiple stop losses being triggered, which is adding further selling pressure. The market is following last year's pattern because, in 2022, the Nifty saw a doji candle (which indicates a range-bound move) in the second and third weeks of January, followed by a sharp fall in the final week of January. However, that sell-off was a buying opportunity because then we saw a sharp post-budget rally. So, as per the template, we can expect a post-budget rally in the market," he added.
Selling pressure was broad-based as all the 19 sector gauges, barring the index of auto shares, were trading lower led by S&P BSE Power and Utilities index crashing over 7 per cent each. Nifty PSU Bank, Bank Financial Services and Metal indices also dropped between 3-5.5 per cent.
Shares of Adani Group companies were facing heavy selling pressure for second straight session on Friday and fell upto 20 per cent after Hindenburg Research alleged fraud by Adani Group.
Shares of Adani Ports and SEZ fell as much as 15 per cent, flagship Adani Enterprises dropped 10 per cent, Adani Power and Adani Wilmar were locked in 5 per cent lower circuit and Adani Total Gas and Adani Transmission were locked in 20 per cent lower circuit.
State Bank of India, ICICI Bank, Bharat Petroleum, ONGC, Axis Bank, Asian Paints, Hindalco and IndusInd Bank were among the top losers in the Nifty 50 basket of shares.
On the other hand, Tata Motors jumped 8.2 per cent, in an otherwise, after the company on Wednesday reported a consolidated net profit of Rs 3,043 crore in the December quarter, its first profit in two years, on account of robust sales.
The Mumbai-based auto major had reported a net loss of Rs 1,451 crore in the October-December quarter of the previous fiscal.
Bajaj Auto, Dr Reddy's Labs, ITC, Divi's Labs, Cipla and Sun Pharma were also among the notable gainers.
The overall market breadth was extremely negative as 2,816 shares were declining while 673 were advancing on the BSE.