(Bloomberg) -- Before the trading day starts we bring you a digest of the key news and events that are likely to move markets. Today we look at:
- Adani Group charged
- Green Energy hype
- HDFC Bank inflows
Good morning, this is Chiranjivi Chakraborty, an equities reporter in Mumbai. Traders are bracing for a rough start to the day as allegations of Adani Group founder Gautam Adani being involved in a bribery plot will likely bruise the conglomerate’s stocks as well as market sentiment. Shares of lenders to the group may also be in the spotlight. Meanwhile, NTPC Green Energy will hope that the hype around renewables will be able to carry its IPO over the line.
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Adani Group may face fresh attack from bears
Bears may double down on their bets on Adani Group shares after US prosecutors charged founder Gautam Adani with helping drive a $250 million bribery plot. Already, the group’s market value has fallen to its lowest level since December last year, erasing nearly $65 billion from its June peak of $234 billion. While the impact of the US short-seller Hindenburg Research has faded, the group’s expansion plans across ports and airports have yet to gain traction with investors concerned about pricey valuations. Already, the allegations have prompted the group to scrap its $600 million bond sale.
Retail investor stomach for hype still strong
A bruising market correction typically dampens investor appetite for stocks driven by narratives or hype. India’s retail investors seem to be an exception, turning out in strong numbers to bid for shares of NTPC Green Energy on Tuesday. While the renewable energy company’s IPO saw a lukewarm response from institutions, the portion reserved for retail investors was fully sold within hours of its launch. The recent success of Waaree Energies, whose debut doubled investors’ money, individual investors are hoping NTPC’s unit can deliver a similar outcome.
Traders await pay day on HDFC Bank as MSCI inflows loom
HDFC Bank shares are outperforming the broader market this week as traders pile in ahead of the anticipated buying from passive funds tied to MSCI indexes on Nov. 25. The stock is set to attract inflows of about $1.8 billion, with its increased weight in the MSCI indexes taking effect at the close of trading on Monday. Post that, the stock will likely trail the market as has been seen in the past with such MSCI-related trades.
Analysts actions:
- Mahanagar Gas Raised to Outperform at Macquarie; PT 1,280 rupees
- Apollo Tyres Raised to Reduce at Elara Secs India; PT 486 rupees
- Bharti Airtel Affirmed at BBB- by Fitch
Three great reads from Bloomberg today:
- Nvidia Says New Chip Remains on Track After Forecast Disappoints
- Fed’s Collins Says More Easing Needed, Final Destination Unknown
- Big Take: US Startup Fuels $3 Billion Stablecoin Boom in Africa
And, finally..
Developer stocks may emerge leaders if the broader market rebounds. The 14-day relative strength index for the NSE Nifty Realty Index shows a diverging trend from its price, indicating that the gauge may be oversold. In the past three sessions, the index has closed higher and outperformed the broader market. This shows that investors might be starting to see value in these stocks, which have tumbled over 15% from their June peak.
--With assistance from Alex Gabriel Simon and Kartik Goyal.
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