Equity indices slump for second day amid heavy selloff in RIL

Benchmark equity indexes BSE Sensex and NSE Nifty extended their losses for the second straight session on Friday after heavy selling in index heavyweights such as Reliance Industries, Adani Enterprises and Adani Ports. The Sensex 30 share index traded over 1,800 points down at 59,108 at around 12.40 pm IST against the 60,978. The 50-share Nifty index fell more than 550 points to 17,566 from 18,118 during the same period. The Indian equity markets were dragged down by a number of factors.

Sentiments were put under pressure after the United Nations cut India's growth forecast by 20 basis points to 5.8 per cent for the current calendar year due to higher interest rates and the risks of recession in the developed world weighing on investment and exports. It also projected that global economic growth would slow to 1.9 per cent in 2023 from an estimated 3 per cent in 2022.

Exodus FII of the FII

Foreign institutional investors have been selling more market sentiment in January. They have sold shares worth over 16,500 crore on a month-to-date basis until January 25. In 2022, they offloaded shares worth more than 1.20 lakh crore.

The banks in RIL, Adani and in RIL are being sold.

The shares of energy-to- telecom giant Reliance Industries, which holds more than 10 per cent weightage in the Nifty index, put some pressure on the Indian equity market on January 27. The scrip traded over 2.50 per cent lower at Rs 2,321 in the afternoon. Some other Nifty stocks including Adani Ports and Adani Enterprises were down 17 per cent and 9.18 per cent, respectively. Shares of Adani Group shares came under pressure after a January 24 report by Hindenburg Research claimed that the Indian conglomerate had engaged in stock manipulation and accounting fraud over the course of the last few decades. State Bank of India, ICICI Bank and Axis Bank also fell over 3 per cent.

With rising interest rates, there are expectations that risk-averse investors will shift towards fixed deposits and other safe investment options. Gold prices have gone up by more than 2,200 since January, to Rs 56903 from Rs 54,656 on December 30 last year.

Market watchers believe that traders remained on the sidelines ahead of the Union Budget for FY 2023 -- 24. Finance Minister Nirmala Sitharaman will present the Union Budget 2023 -- 24 on February 1, 2023. This will be the last full budget of the Modi 2.0 government ahead of the general elections next year.

Adani Total Gas, Adani Green crack up to 20% of investor wealth lost, 9 L cr investor wealth lost.