Markets garner largest single-day gain of 2023 after mega block deal in Adani stocks; SBI, Airtel, RIL top gainers

Sensex closed at 59,808.97 up by 899.62 points or 1.53%. While Nifty 50 ended at 17,594.35 higher by 272.45 points or 1.57%. India’s volatility index tumbled by over 6%.

The upside is widely attributed to mega-buying from foreign investors in Adani Enterprises, Adani Green Energy, Adani Ports, and Adani Transmission. US-based GQG Partners purchased equity shares in these Adani companies for a massive ₹15,446 crore in a series of secondary block deals.

Rohan Shah-head technical analyst at Stoxbox said, “Two major gainers in the Nifty 50 were Adani Enterprise & Adani Ports. The share price of Adani Enterprises rose over 16%, while the share price of Adani Ports rose over 9%.”

The block deal in Adani stocks also lifted major public sector banks as PSBs were impacted after the Hindenburg report in late January due to their exposure against the Gautam Adani’s group.

SBI took the lead in the strong rally by gaining over 5.1% followed by Bharti Airtel (+3.3%), Reliance Industries (+2.5%), ITC (+2.4%), Tata Steel (+2.2%), and IndusInd Bank (+2.18%) on Sensex.

Other heavyweights such as HDFC Bank, Tata Motors, ICICI Bank, HDFC, Kotak Bank, Titan, L&T, M&M, NTPC, and HCL Tech also saw substantial upsides between 1-2%.

On the laggards front, Tech Mahindra, and Ultratech Cements were worst hit by plunging over 2% and 1% respectively on Sensex.

All sectoral indices were in the green with banking stocks driving the rally. Nifty PSU Bank was the top performer surging by a whopping 5.40%. While overall Bank Nifty skyrocketed by 861.55 points or 2.13% to end at 41,251.35. BSE Bankex zoomed over 973 points.

The metal index too contributed significantly to the upside by surging over 3.5% on NSE and 1.5% on BSE. Financial services, FMCG, healthcare, realty, and media stocks also witnessed a sharp upside.

Also, Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities said, “Indian markets reacted to a strong positive undercurrent across the global equities that triggered a massive bout of short covering in key sectors. Markets were in a fall season and hence the valuations had become attractive prompting traders to shrug off the weak sentiment.”

Further, at the interbank forex market, the rupee closed at 81.9650 up by 0.77% driven by strong foreign funds flow in Adani firms, positive Asian peers, a slide down in the dollar, and strong buying in domestic equities. For the week, the local unit has climbed by 0.77% — making it the best weekly upside since mid-January. It is expected that RBI has most likely sold dollars through PSBs to curb depreciation in the rupee.

Going ahead, Ajit Mishra, VP – of Technical Research, at Religare Broking, said, Today’s rebound can be attributed to the recovery in the US as we’re mirroring the global markets and we expect the same trend to continue. On the index front, Nifty has surpassed the hurdle of the long-term moving average i.e. 200 EMA but sustainability would be critical for a further rebound. Meanwhile, we reiterate our view to focus on stock selection and overnight risk management.”

Also, Rupak De, Senior Technical Analyst at LKP Securities said, “Indian equities have witnessed a smart recovery during the day. On the daily chart, the index has given a consolidation breakout, suggesting a rise in optimism. On the higher end, it found resistance around the 14-day moving average. The short-term trend remains negative as the index has closed below the critical short-term moving average. The momentum oscillator RSI is in bullish crossover on the daily timeframe. On the higher end, the Nifty may move higher once it moves above 17650; on the higher end, resistance is visible at 17800. On the lower end, support is visible at 17470.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.