Sensex Today Tanks 927 Points | Adani Enterprises Bleeds 11% | 5 Reasons Why Indian Share Markets are Falling

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After opening the day lower, Indian share markets extended losses as the session progressed and witnessed a sharp selloff.

Benchmark indices crashed after strong economic data from the US kept investors worried that central banks would have to keep raising interest rates to tackle inflation.

At the closing bell, the BSE Sensex stood lower by 927 points (down 1.5%).

Meanwhile, the NSE Nifty closed lower by 272 points (down 1.5%).

Divis Laboratories, Bajaj Auto, and ITC were among the top gainers today.

Adani Ports, Adani Enterprises, and Grasim, on the other hand, were among the top losers today.

The SGX Nifty was trading at 17,557, down by 289 points, at the time of writing.

Broader markets settled on a weak note. The BSE Midcap fell 1.2% while the BSE SmallCap index ended 1.1% lower.

All sectoral indices ended in red with stocks in the energy sector, metal sector, and power sector witnessing most of the selling.

Shares of Cera Sanitary and Blue Star hit their 52-week highs today.

Now track the biggest movers of the stock market using stocks to watch today section. This should help you keep updated with the latest developments...

Asian share markets ended in red. The Hang Seng ended lower by 0.5% while the Shanghai Composite index fell 0.5%. The Nikkei ended 1.3% lower.

US stock futures are trading on a negative note. Dow futures are trading flat while Nasdaq futures are trading down by 0.1%.

The rupee is trading at 82.91 against the US$.

Gold prices for the latest contract on MCX are trading lower by 0.1% at Rs 56,125 per 10 grams.

Meanwhile, silver prices for the latest contract on MCX are trading down by 0.5% at Rs 65,757 per kg.

Here are five reasons why Indian share markets plunged today.

#1 Weak global cues

US equity markets posted their worst one-day performance so far this year, on Tuesday, as investors feared higher interest rates, on the back of strong macro-economic data.

Following this resilient report, key indices Dow Jones, the S&P 500, and Nasdaq Composite declined over 2% each.

Asia-Pacific markets, too, followed similar footsteps and edged lower in Wednesday's trade.

#2 Hawkish minutes likely from central banks

Both the central banks, the RBI and the US Fed will release minutes from their February policy committee meetings later today.

While India's retail inflation accelerated to 6.5% in January 2023, consumer price index (CPI) in the US rose 0.5% in January to 6.4%. With this spike in inflation data, it gives more ammunition to both central banks to stick to their policy tightening path.

#3 Selloff in heavyweights

The weakness in Indian market was driven by losses across index heavyweights.

Shares of Bajaj twins, Reliance Industries, State Bank of India, Tata Motors, Wipro, NTPC, Hindustan Unilever, Asian Paints, among others declined up to 3%.

#4 Rupee factor

The domestic currency depreciated 4 paise to 82.83 against the US dollar in Wednesday's early trade.

While the rupee opened flat at 82.79 against the US dollar, it lost some steam later to quote at 82.83. The dollar index, which gauges greenback's strength against a basket of six currencies, meanwhile, slipped 0.09% to 104.01.

#5 Geopolitical factors

On Tuesday, Russian President Vladimir Putin issued a warning to the West regarding the situation in Ukraine.

In an alarming move, Putin suspended a crucial nuclear arms control treaty, disclosed the deployment of new strategic systems on combat duty, and threatened to resume nuclear tests.

This has added to uncertainly.

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Adani Power calls off Rs 70.2 billion coal plant acquisition

In the news from the power sector, shares of Adani Power were buzzing today.

Adani Power has clarified to the stock exchanges that it has called off its plan to acquire a coal plant project in central India.

In August 2022, Adani Power agreed to take control of DB Power at an enterprise value of Rs 70.2 bn.

The acquisition was approved by the country's competition regulator a month later.

The Adani Group company and DB Power mutually agreed not to proceed with the transaction after a long-stop date expired on 15 February 2023. DB Power operates a 1.2-gigawatt coal power project in the Indian state of Chhattisgarh.

The DB Power buyout, which currently operates a 2x600 MW coal-fired power plant in Janjgir Champa district in Chhattisgarh, was expected to expand Adani Power's offerings and operations in the thermal power sector in the state.

With a 200% rise in share price, Adani Power was the top gainer in 2022.

This rally became a standstill when US-based short-seller Hindenburg came out with its long report, alleging Adani group of stock manipulation, among other things.

Adani group stocks have been in a free fall since then. Some stocks from the group even fell around 60%.

To know whether or not it's time to buy the dip in the Adani Group stocks, check our editorial: Adani Group stocks: should you catch this falling knives?

Bharat Electronics signs MOU with ADA and DRDO

In news from the defense sector, shares of Bharat Electronics gained 1% today.

Shares of Bharat Electronics edged up on 22 February 2023 following an announcement that the company had signed a deal with the Aeronautical Development Agency (ADA) and the Defence Research and Development Organisation (DRDO) for advanced medium combat aircraft.

The MoU was announced on the sidelines of the Bandhan event, held at Aero India 2023.

The AMCA is a fifth-generation, multi-role, all-weather fighter aircraft designed with high survivability and stealth capability.

Value Stocks: Stocks with Limited Downside but Good Upside Potential

The deal outlines a collaboration between the companies to design, develop, and produce the Internal Weapon Bay Computer and other LRUs for the AMCA to provide lifetime product support to the Indian Air Force.

With this order, the company's order book stands at Rs 501.2 bn, down 11% YoY indicating that order inflow in the third quarter has not been very strong.

Despite the order book receding to a two-year low, BEL's management remains confident in the company's prospects.

Bharat Electronics is a fundamentally strong company with good return ratios, zero-debt and strong debt coverage metrics.

It is also among the top defense stocks in India with big growth stories.

Speaking of the defense sector, note that the government's Atmanirbhar Bharat Abhiyan has emphasized the need of self-reliance in security space.

Given the increasing focus on self-reliance, the Ministry of Defense (MoD), has set a target of doubling the defense production to US$ 25 bn by 2025.

That is why we believe that the defence sector could produce the next set of multibagger stocks over the long run.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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