Sensex Down 422 Points, Nifty at 23,349; Tomorrow Nifty Prediction

Tomorrow Nifty Prediction

Disappointment Over Allegations Against Adani in US Court: Market Prediction  for November 22

On November 21, the Indian stock market witnessed a sharp decline, driven by both global macroeconomic concerns and a series of disappointing developments surrounding the Adani Group.

Allegations against Adani in a U.S. court became a significant catalyst for the sell-off, undermining investor sentiment and contributing to bearish pressure on the indices.

As the market closed, it reflected the continuation of a downward trend characterized by lower tops and lower bottoms—classic signals of strong selling pressure.

The Sensex ended the day at 77,155.79, down by 422.59 points or 0.54%. Similarly, the Nifty closed at 23,349.90, a loss of 168.60 points or 0.72%.

The overall market breadth was heavily negative, with 1,180 stocks advancing, 2,614 stocks declining, and 89 stocks unchanged.

The BSE Midcap and Smallcap indices also suffered losses, falling by 0.3% and 0.6%, respectively. This broad-based weakness suggests a lack of investor confidence and reflects the dominance of the bears in the market.

Key Stock Movements: The Impact of Adani-Related News

The most significant impact of the day’s sell-off was felt in stocks related to the Adani Group. Adani Enterprises, Adani Ports, and other Adani-linked companies saw steep declines, adding to the negative sentiment surrounding the market.

Adani Enterprises, in particular, was one of the top losers on the Nifty, reflecting the growing concerns regarding the legal and financial troubles facing the conglomerate.

The Adani Group has been under the microscope following a series of allegations in the U.S. court, which has led to renewed scrutiny of its financial practices and governance.

On the other hand, a few stocks managed to buck the trend. Power Grid Corporation, UltraTech Cement, Hindalco Industries, HCL Technologies, and Grasim Industries were among the gainers.

These stocks were supported by positive sector-specific news, as well as relative strength in certain industries like IT and infrastructure.

Sector-wise, the market was broadly negative. The Energy, FMCG, Oil & Gas, PSU Bank, Media, Auto, and Metal sectors all saw declines in the range of 1-2%.

This widespread weakness suggests a lack of confidence across multiple sectors, with few areas of safe haven for investors.

However, the Realty index showed resilience, gaining 1%, and the IT index added 0.5%, providing some relief in an otherwise downbeat market.

Global and Domestic Concerns Weigh on Market Sentiment

The global environment also contributed to the weak market performance. Geopolitical tensions, concerns over global inflation, and tightening monetary policies by central banks continue to weigh on investor sentiment.

In particular, the ongoing trade and diplomatic tensions between the U.S. and China, as well as fears of a potential economic slowdown in the West, added to the market’s vulnerability.

Domestically, the Adani Group’s legal troubles came at a time when the Indian economy is still dealing with the aftereffects of higher inflation, rising interest rates, and a volatile currency.

While the broader economic fundamentals remain relatively stable, investor confidence has been shaken by allegations of corporate governance lapses and financial irregularities within some of India’s largest companies.

This uncertainty has led to an increase in risk aversion, with investors retreating from high-risk assets, particularly in the Indian stock market.

The Indian rupee also continued to face pressure, which in turn added to the bearish sentiment in the equity markets. A weakening currency makes imports more expensive, thus affecting corporate profit margins, especially for companies with significant foreign debt.

Technical Analysis: Short-Term Weakness and Key Levels to Watch

According to Rupak Dey, Senior Technical Analyst at LKP Securities, the short-term trend of the market remains weak.

After a weak start on November 21, the Nifty traded in a narrow range throughout the session, remaining below its 200-day moving average (DMA).

This is a key technical indicator that suggests a continued bearish bias in the market. The Relative Strength Index (RSI), which tracks the strength of market momentum, has also entered a bearish crossover, further reinforcing the negative sentiment.

Support and Resistance Levels:

• The immediate support for Nifty is at 23,200. If the index breaks below this level, it could trigger further corrections and bring in additional selling pressure.
• On the upside, resistance is seen at 23,550. A move above this level could open the door for a potential upward rally, but this would require significant positive triggers, which seem unlikely in the current environment.

Aditya Gaggar, Director at Progressive Shares, noted that the “Adani Saga” had a profound effect on market sentiment, particularly in the morning session when a sharp decline was observed following the negative news.

After the initial sell-off, the market entered a consolidation phase, trading range-bound for the rest of the day.

Despite this, the broader market, particularly mid and small-cap stocks, showed some resilience, outperforming the frontline indices.

However, the PSU Banks and Media sectors, which are generally more sensitive to domestic news, suffered significant losses, falling by more than 2%.

The technical setup also indicates the continuation of a bearish trend. A fresh bearish candle was formed on the Nifty charts, confirming the dominance of the bears.

Selling pressure was evident on every bounce, and for a meaningful trend reversal to take place, the Nifty would need to cross the crucial resistance level of 23,800.

Until then, the market is likely to remain in a weak phase, and there is a possibility of a breakdown below the November 21 low. A further breakdown could bring in support levels at 23,000.

Market Prediction for November 22: Caution Advised Amid Volatility

In conclusion, the market is likely to remain volatile on November 22, with continued focus on global macroeconomic factors and domestic stock-specific developments.

Traders should exercise caution, particularly in light of the ongoing Adani-related news. The legal troubles surrounding the conglomerate, combined with the broader macroeconomic challenges, could keep sentiment subdued.

Investors should pay close attention to critical technical levels in the Nifty. A sustained breach below 23,200 could signal further downside risk, while any upward movement will depend on overcoming the resistance at 23,550.

Given the uncertainty in both global and domestic markets, caution remains the watchword, and traders should stay vigilant for signs of a trend reversal or further market weakness.