Adani case and global concerns weigh on markets amid election polls

The Indian stock market is facing a complex situation today, with multiple factors influencing investor sentiment. The case against Gautam Adani and his associates, who have been indicted by a US court for alleged bribery in solar power deals, is likely to remain a significant concern for the market. The accusations, which include claims that Adani paid bribes amounting to $25 million to individuals in the Indian government, have already had an impact on Adani Group's stock prices and could continue to weigh on market sentiment. Adani is one of the wealthiest individuals globally, and the implications of this case are being closely watched by both domestic and international investors.

Exit poll effect

Adding to the uncertainty, exit polls for state elections, predicting an advantage for the BJP-led alliance in Maharashtra and Jharkhand, have generated optimism in some quarters. However, market history shows that exit poll results don't always translate into sustained market gains, and there are worries that this optimism may fade as concerns about global economic conditions resurface. 

One of the main concerns today is the warning from Nvidia, the AI chip giant, about slowing growth. Although the company reported impressive revenue and profit increases for the third quarter, its outlook for the fourth quarter is far less optimistic. The sharp deceleration in Nvidia's growth compared to earlier in the year is raising alarm bells among investors, particularly those focused on the tech sector. Nvidia's stock dropped by 2% in after-market trading, and this is likely to create further headwinds for global markets.

Global markets

In the broader market, the US stock indices showed mixed performance on Wednesday, with the Dow Jones rising slightly, while the S&P 500 remained virtually unchanged and the Nasdaq fell. There were also signs of caution in the currency markets, with the US dollar strengthening, and bond yields on US Treasury securities staying high at 4.41%. These factors, coupled with ongoing international tensions, particularly over the situation in Ukraine, continue to create a sense of unease.

Indian market

The Indian market started strong on Tuesday but lost momentum in the afternoon, ending with only a modest gain. While the broader market saw more advancers than decliners, the Nifty index remains under pressure, having closed below its 200-day exponential moving average. This indicates a potential for further declines, with support levels at 23,470 and 23,395, and resistance levels at 23,710 and 23,785.

Gold update

On the commodity front, gold prices have surged amid the ongoing uncertainty, with the price of gold reaching $2,650 an ounce. The rising geopolitical tensions, particularly the ongoing conflict in Ukraine, have driven demand for gold as a safe haven. Analysts are predicting that gold could potentially exceed $3,000 an ounce by the end of 2025.

Oil prices also remain high, with Brent crude trading just above $73 a barrel, although it has shown little movement in recent days. The rupee has come under some pressure, edging lower against the dollar, which continues to strengthen globally. This adds to the challenges faced by the Indian market, especially considering the influence of global factors on the local economy.

Meanwhile, the cryptocurrency market has experienced some volatility, with Bitcoin hitting a record high of nearly $95,000 before retreating. Ether also saw a significant price change, reaching as high as $3,327 last week before dipping to around $3,070.

In summary, the market today is grappling with a mix of domestic and international concerns. The Adani case continues to cast a shadow over the market, while global factors, including Nvidia's warning, geopolitical tensions, and rising commodity prices, are contributing to a more cautious market outlook. For investors, these mixed signals present both risks and opportunities, and the situation remains fluid as we approach the close of the week.

Market indicators (19 November)

Sensex 30 77,578.38 +0.31%

Nifty50 23,518.50 +0.28%

Bank Nifty 50,626.50 +0.52% 

Mid Cap 100 54,548.25 +0.93% 

Small Cap 100 17,677.35 +0.97% 

Dow Jones 43,268.94 -0.28% 

S&P 5916.98 +0.40% 

Nasdaq 18,987.47 +1.04% 

Dollar($) ₹84.41 +₹0.02 

Dollar index 106.15 -0.13 

Gold (oz) $2631.80 +$19.90 

Gold (Pavan) ₹56,520 +₹560 

Crude (Brent) oil $73.31 +$00.16 

(Wednesday, November 20, 2024) 

Dow Jones 43,408.47 +0.32% 

S&P 5917.11 +0.400% 

Nasdaq 18,966.14 -0.11% 

Dollar index 106.68 +0.47 

Gold (oz) $2650.60 +$18.80 

Gold (Pavan) ₹56,960 +₹440 

Crude (Brent) oil $73.12 -$00.19