Stock Market: Indices weigh debt ceiling suspense; tech turnaround gives tailwinds
By S Jha
New Delhi, May 22: US President Joe Biden will hold discussions with House Speaker Kevin McCarthy later in the evening over the debt ceiling amid the American domestic politics keeping traders guessing with a section betting on an imminent market crash on the basis of the surge in the option prices.
Biden, who is from democratic party, is pitted against the demands of the Republicans to cut the US debt. Biden also cut short his Asia tour, and returned home after the G7 Summit in Hiroshima to pay attention to the looming economic challenge.
But the Indian indices were mixed. Nifty soared with over 100 points’ gains, as Adani group of companies came firing all cylinders on the back of the assessments of the market participants that the Supreme Court panel has given a favourable report to lift the pall of gloom over the stocks. On the other hand, the Bank Nifty remained under pressure, and ended the day with cut.
The contrasting behaviour of Nifty and Bank Nifty may be explained for the financial markets weighing the US debt ceiling negotiations and the likely impacts on the banking sector. But the Nifty was firm to close above 18300 level on the back of the gains in the Adani Enterprises and Adani Ports along with the IT sector gaining strongly.
The IT index was higher by over two per cent, with the heavyweights such as Tech Mahindra, Infosys and HCL Technology gaining firmly on the bourses. The midcap and smallcap IT companies also gained strongly on the bourses, with the likes of LTMindtree closing on Rs 5000 mark. The whole IT pack has been trending since Friday, and the rally continued. This is in line with the gains on NASDAQ, which in contrast to under pressure Dow Jones, has been gaining after the tech-giants reported strong numbers.
Meanwhile, the day belonged to the Adani Group, as there was a secular rally and several of the companies from the stable were locked in the upper circuits. Adani Enterprises gained the most with over 17 per cent rise in the share price, while Adani Wilmer was also locked with 10 per cent upper circuit. Adani fresh buyout Ambuja Cement also gained firmly. The Rs 2400 option price of Rs 12 of Adani Enterprises zoomed during the day to over Rs 70, mirroring the mad rush in the company, which reported short covering.
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