Sensex, Nifty crash as Adani group shares fall up to 20% in early trade
Sensex, Nifty Today: The S&P BSE Sensex fell by 584.87 points, reaching 76,993.51, while the NSE Nifty50 dropped 202.40 points to settle at 23,316.10.
According to technical charts, Adani Enterprises stock appears to be re-testing support near its 200-week moving average, similar to the decline triggered by the Hindenburg allegations in January-February 2023.
Adani Group shares faced heavy selling pressure on Thursday, plummeting up to 20 percent following the indictment of Gautam Adani by the US SEC over his involvement in an alleged multi-billion-dollar bribery and fraud scheme.
Authorities revealed that Adani, along with seven others, including his nephew Sagar Adani, allegedly agreed to pay approximately $265 million in bribes to Indian government officials to secure solar energy supply contracts projected to generate $2 billion in profit over 20 years.
As per the court order, arrest warrants have been issued for Gautam Adani and his nephew Sagar Adani, with prosecutors planning to forward these warrants to foreign law enforcement agencies.
During Thursday’s significant decline, Adani Enterprises stock appeared to be testing support around its 200-week moving average (WMA), a crucial level where the stock had previously found support during the Hindenburg allegations-induced downturn in January 2023, according to technical charts.
In response to the charges by US prosecutors, the Adani Group also decided to cancel a planned $600 million bond today.
On the stock exchanges, Adani Energy Solutions plunged to the 20 percent lower circuit at Rs 174. Adani Power, Adani Green, and Adani Total Gas also fell by as much as 17 percent. Meanwhile, shares of the group’s flagship company, Adani Enterprises, reached a 10 percent lower limit during the opening trades.
Here’s how Adani group stocks are placed on the charts post today’s sharp fall:
Adani Enterprises
- Current Price: Rs 2,539
- Downside Risk: 23.2%
- Support: Rs 2,345; Rs 2,200
- Resistance: Rs 2,650
Adani Enterprises stock has generated a new sell signal on the daily chart, currently trading below the lower-end of the Bollinger Bands. This indicates a bearish trend as long as the stock remains under Rs 2,650. On the downside, significant support is at Rs 2,350, aligning with its 200-week moving average (WMA).
During the sharp decline following the Hindenburg allegations in January 2023, Adani Enterprises found support near its 200-WMA. Therefore, this level is likely to serve as crucial support once more. In the 2023 downturn, the stock eventually found support around the Rs 1,000 mark, which corresponded to the 200-WMA at the time.
The long-term chart suggests that if the 200-WMA is breached, Adani Enterprises could potentially fall further towards Rs 1,950, with interim support expected around Rs 2,200.
Adani Ports
- Current Price: Rs 1,161
- Downside Risk: 22.5%
- Support: Rs 1,115; Rs 1,045
- Resistance: Rs
Adani Ports is likely to maintain a negative bias as long as it remains below Rs 1,220. The medium-term chart indicates that Adani Ports could test its 100-week moving average (WMA) support at Rs 1,045 in the near term; falling below this level could potentially lead to a decline towards approximately Rs 900. Interim support is present at Rs 1,116.
Adani Green
- Current Price: Rs 1,150
- Downside Risk: 28.3%
- Support: Rs 943
- Resistance: Rs 1,320
Adani Green is expected to maintain a bearish bias as long as it stays below Rs 1,320. It is currently trading below key moving averages on both the daily and weekly scales. The stock appears to be on track to test its monthly super trend line support at Rs 943. A break below this level could potentially lead to a decline towards Rs 825.
Adani Energy Solutions
- Current Price: Rs 697
- Downside Risk: 34%
- Support: Rs 677; Rs 640
- Resistance: Rs 785
The pivot point for Adani Energy Solutions stock is Rs 785, below which it is expected to exhibit weakness. Currently, the stock is testing support at the lower end of the Bollinger Bands on the monthly scale at Rs 677. This support aligns with the February 2023 low of approximately Rs 640. If this support level is breached, a prolonged decline towards Rs 460 is possible.
The current trend fears the market that the share values may fall by 50% which will be the major loss of the stock holders invested in the Adani Group.
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