All 10 Adani Group stocks closed higher, the first such occurrence since the explosive report by US short-seller Hindenburg Research in late January sparked an unprecedented rout in the conglomerate’s shares.
(Bloomberg) — All 10 Adani Group stocks closed higher, the first such occurrence since the explosive report by US short-seller Hindenburg Research in late January sparked an unprecedented rout in the conglomerate’s shares.
Flagship firm Adani Enterprises Ltd. led the rally, advancing almost 15% on Wednesday, as the embattled group conducted investor meetings in Singapore and Hong Kong this week to shore up confidence. Adani Green Energy Ltd., Adani Transmission Ltd. and Adani Power Ltd. rose by the 5% daily limit.
Adani Total Gas Ltd. climbed 4.9%, ending a 26-session losing streak.
READ: Adani Stock Bearing the Brunt of Rout Has Lost 76% in Value (2)
The 10 companies part of billionaire Gautam Adani’s ports-to-power empire have added about $9 billion in market value in the past two sessions, trimming the combined loss since Hindenburg published its report Jan. 24 alleging accounting fraud and stock manipulation to $143 billion. Adani Group has repeatedly denied the accusations.
As the conglomerate shores up support from bond investors overseas, the Mint newspaper reported that India’s central bank is examining whether it is relying excessively on local lenders to fund its operations and expansion plans. Adani Group told creditors it has secured a $3 billion loan from a sovereign wealth fund, Reuters reported citing unidentified sources.
READ: Adani CFO Says No Refinancing, Capital Plans at HK Roadshow
The rally in Adani Enterprises has the potential to extend further, according to technicals. Chart patterns show that bulls may be eyeing 1,900 rupees — nearly 22% higher than Wednesday’s close — so long as they’re able to hold the stock above critical support at almost 1,400 rupees.
The recovery in the flagship’s shares that began Tuesday saw the stock end that session with a so-called “bullish engulfing” pattern. Also, Tuesday’s volume on the National Stock Exchange stood at nearly 34 million shares, about 2.4 times the 20-day average and the highest since Feb. 3, when 43.9 million shares traded on the day of crash lows.
“Technical factors are suggesting a strong counter trend move in Adani Enterprises,” said Anuj Dixit, vice president of equity research at Mumbai-based Sovereign Global Markets Pvt Ltd. “There is potential for further rally in the stock as the bullish engulfing pattern is supported by high volumes.”
–With assistance from Ishika Mookerjee.
(Updates throughout.)
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