The Indian stock market is trading in the red following weak Asian cues. Sensex is down 249.70 points or 0.47% at 52523.35, and the Nifty shed 83.40 points or 0.53% at 15785.90.
The sectors which dragged the most included the power and the metal space which shed up to 2 percent.
S&P BSE Power was down almost 2 percent falling over 4 percent since the last 3 days largely dragged by Adani group stocks after media reports suggested that the National Securities Depository Ltd (NSDL) has frozen three Foreign Portfolio Investors’ (FPIs) accounts that own shares in four of the listed Adani firms.
Shares of Adani Transmission and Adani Power fell 5 percent each followed by BHEL, Adani Green and Power Grid which shed over 2 percent each.
However, Adani Group said, “We bring to your kind attention, the news headlines published in ET that NSDL has frozen the accounts of 3 foreign funds-Albula Investment Fund, Cresta Fund and APMS Investment Fund holding shares in Adani Group Companies. We regret to mention that these reports are blatantly erroneous and are done to deliberately mislead the investing community. This is causing irreparable loss of economic value to the investors at large and reputation of the group,” Adani Enterprises said in a statement.
Analysts are now advising staying away from Adani group stocks.
“No fresh trades are advisable for now in Adani group stocks. As these shares are in control of the operators and the news is out, the risks are high. There can be unpredictable movements in either direction. Those who are trapped in long positions should wait patiently for a bounce to exit,” said Sanjeev Agarwal, Founder and CEO, Alpha Quantum Capital Management Ltd.
Metal stocks are also under pressure with the index trading lower by 2 percent. The top losers included SAIL and Jindal Steel & Power which are down 3 percent each followed by Tata Steel, Hindalco Industries, NALCO Vedanta and JSW Steel which shed 2 percent each.
Base metals outperformed and reached a multi-year high in FY21 on a weak dollar and strong manufacturing and economic data from China and the US after vaccine news surfaced, Sunilkumar Katke, Head, Commodity & Currency, Axis Securities, told Moneycontrol.
Brokerages are positive on the sector and believe the correction has offered a good opportunity to enter the sector.
Centrum Broking in its report recommends buying steel stocks. “We revised the earnings of steel companies earlier post their Q4FY21 results. Tata Steel, SAIL and JSPL are the top picks in order of preference,” it said.
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