Stock Market: Adani in circuit play; banks & IT shrug off fear
By S Jha
New Delhi, February 2: The foreign institutional investors continue to short the Indian equity market. The FIIs have been shorting the Indian equities since mid-November. They have stepped up their short-selling India amid Adani group meltdown.
The Adani group of stocks will enter into additional surveillance from Friday. They were in circuits. Flagship Adani Enterprises has been scorched. The scrip is down by almost two-third from its peak of Rs 4500 seen only a few day ago. With the Reserve Bank of India asking banks to report their exposure, some of the banks on their own to make disclosure to the public. IndusInd Bank which along with the State Bank of India had been hammered recovered grounds slightly after disclosing that its exposure to the beleaguered conglomerate was minimal.
On Thursday, which was also a weekly expiry for the option contracts, both the indices – Nifty and Bank Nifty – swung wildly. After they dipped to the day’s low, the sharp recovery in IndusInd Bank and ICICI Bank brought short covering in play to take the Bank Nifty into the green territory. Clearly, the Indian stock market is seen to be delinked with the positive cues of the global markets. However, they are reacting with deep cuts on negative cues. The US equity markets were almost flat a day after the Fed announced a 25 basis points hike in the rate.
The FIIs again sold a net of over Rs 3000 crores of the Indian equities. It has been noted for several days that the FIIs have been shorting India as part of their rebalancing efforts to shift bases to the Chinese equity markets to take advantage of the valuation gaps between the two countries. The domestic institutional investors have been buying into the falling market, as they again bought a net of Rs 2371 crores on Thursday.
The FMCG behemoth ITC rose sharply by about five per cent to touch the high of Rs 380 during the day. The cigarette to flour company has been a steady winner in the market since last year. With no negative surprise for the company in the Budget, ITC sharply rose on Thursday. It was in the good company of the biscuit maker Britannia, which also rose by about five per cent on the back of good quarterly result. However, it was the IT sector which rescued the indices from the bear grips led by the market leader Infosys, which gained over two per cent, and was supported by HCL Technology, TCS, Wipro and others.
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