Adani Group Fiasco: Nifty Bank Cracks Hard, Falls 2,300 Pts in 2 Days!
Investors in the banking space are having a tough time for the last two sessions. The Hindenburg’s research report on Adani Group alleging financial frauds has sent a shockwave to the Indian markets. The Group companies have taken a massive hit, some even hitting 20% lower circuit.
However, investors are also concerned for the banks that have exposure to Adani Group, which led to a severe selling spree in the banking space. For instance, the Nifty Bank index plunged by around 2,367 points (as per today’s provisional closing) in a mere two sessions. The index heavyweights such as HDFC Bank (NS: HDBK ) and ICICI Bank (NS: ICBK ) (accounting for around 58.69% weightage) lost around 4.7% and 6.1%, respectively in two sessions.
Today, none of the 12 banking stocks of the index was able to close in the green, with the top loser being Bank of Baroda (NS: BOB ), falling 7.36%. The Nifty PSU Bank index was in the worst shape, losing a surprising 5.43% today, totaling a 9.5% loss for the week and delivering the lowest weekly closing since mid-November 2022.
Image Description: Daily chart of Nifty Bank (spot)
Image Source: Investing.com
Coming to the technical setup of the Nifty Bank, the aggressiveness of bears is clearly seen. Two consecutive days of 1,000+ points crack is denoting some serious selling which is likely to continue for a while, at least till the next support level of around 39,250 - 39,200 is on the screen. This indicates, that the index is still left with some fuel to burn the bulls, and it can travel ~1,100 points more to the south.
No doubt that the index seems oversold now which could lead to a bounce, but just like the benchmark Nifty 50 index, every rally from here is a selling opportunity and it should not be mistaken for a trend reversal. The current resistance of the index is around 43,000, which is roughly 2,600 points away from the CMP, all thanks to a one-way fall. This would make it difficult to spot ideal entry levels to go short as the range has expanded but a retracement till 41,500 - 41,600 might provide a good risk-to-reward ratio.
Also, budget day is around the corner, along with the US Fed’s first monetary policy meeting for the year, both of which are on 1 February 2023 which would also contribute to already increased volatility. As volatility has expanded a lot, traders should keep their portion limit in check.
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nifty can be bounce back on budget dayLike 1
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sir can bounce in budget?? 42500 to 43500 once rally i feel possible?? ..may i right sir ?Like
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Banks can move down and even faith on banks can take a down tickLike
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thanksLike 2
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thanksLike 1
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very helpfulLike 1
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so helpful viewLike 1
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Thanks Siraj.Like
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thank you once again ayush sirLike 1
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You're welcome, Vijay :)Like
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After falling ,you are doing Analysis ....it should be informed before fall , please 🙏🏻Like 4
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thanks once againLike 3
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why delivery percentage in Adani stocks so low?Like
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ur rightLike 1
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Both Nifty and bank Nifty are in correction phase after major topLike
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bantigrover jindLike
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RightLike 2
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ThanksLike 3
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