Sensex, Nifty fall in early trade; Adani Enterprises, Titan, Adani Green shares drop up to 5%

Indian equity markets opened lower on the expected lines on Friday, tracking the weakness in the US stocks and muted cues from the Asian peers. However, traders will be looking at the Union Budget and US Fed's monetary policy meeting in the beginning of the next month.

US stocks sank in the overnight trade after the Fed officials reiterated their hawkish commentary to bring inflation down through more interest rate hikes. Also, fears of the global economic slowdown dented the sentiments further, keeping traders on the tenterhooks.

At 9.20, the 30-share pack BSE Sensex dropped 134.06 points or, 0.22 per cent, trading at 60,911.68. NSE's Nifty50 Index shed 49.60 points or 0.27 per cent to 18,115.75. Broader markets outperformed headline peers but BSE midcap and smallcap indices edged lower. Fead gauge India VIX spied about 3 per cent to 14.72-level.

"We expect the index to endure the upward momentum and gradually challenge the upper band of consolidation placed at 18,300. The past six weeks slower pace of retracement helped index to form a higher base amid oversold conditions, indicating inherent strength that paved the way for next leg of up move," said ICICIDirect Research.

In the process, it expects the Nifty to hold the key support of 17,800 amid ongoing global volatility. Thus, dips should be capitalized on to accumulate quality stocks as the earning season progressions, it said.

Barring the Nifty pharma index, all other sector were trading in red. Metal and reality indices tanked a per cent each, followed by PSU lenders, IT and media counters which shed about half a per cent each.

The crucial issue influencing equity markets globally is whether the US will succeed in containing inflation without falling into a recession. There is no consensus on this. When data indicate a possible recession, US markets go down and all other markets are impacted, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"Early Q3 results indicate good performance by IT and banking. Bank Nifty is slightly weak on concerns of pressure from rising deposit costs. But the credit cycle is strong. IT numbers do not reflect recession fears. Trend indicates that the capital goods segment is strong," he said.

Among the bluechip counters, Adani Enterprises dropped about 3 per cent after the announcement of its mega follow-on public offering (FPO) worthRs 20,000 crore, which will be sold at a discount of 13 per cent from its previous close. Hindalco also dropped 2 per cent amid the volatile aluminium prices. Kotak Mahinra Bank, Titan Company, L&T, Bajaj Finserv, Ultratech Cement and Infosys weakened a per cent each.

On the contrary, HDFC Life Insurance lead the gainers with a 2 per cent rise. Axis Bank rose about a per cent, followed by UPL. Asian Paints inched up ahead of its quarterly earning later in the day. IndusInd Bank also recouped from early cuts after strong Q3 performance.

In the broader market, other Adani Group stocks were at the focus as Adani Green Energy plunged about 5 per cent, whereas Alok Textiles and Rallis India dropped 5 per cent each. Nureca, Manappuram Finance, Indiabulls Housing Finance and RSWM were down 3-4 per cent each.

Among the gainers, PTC Industries jumped 5 per cent, while Ugro Captial was 4 per cent up. Rossari Biotech, Steel Exchange India, Surya Roshni, Mahindra Lifespace Developers and Suven Pharma added 3 per cent each.
 

Also read: HUL Q3 results preview: Profit may rise 8-12% YoY. Volumes & other things to watch

Also read: SGX Nifty drops 83 points: Asian markets, dollar movement, Q3 earnings, FPI flows & more