Green Energy Stocks Turn Red as Adani Probe Adds to Investors’ India Challenges

(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:

Good morning, this is Chiranjivi Chakraborty, an equities reporter in Mumbai. Investor focus remains on the Adani Group stocks as the conglomerate continues to face bad news. Although Nifty futures point to a firm opening, there’s concern that players with exposure to Adani shares may try to make up for the losses by selling other profitable positions, adding to market losses.

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Adani probe adds to investors’ India challenges

The unprecedented bribery charge against the Adani Group can worsen sentiment for global investors already reallocating funds elsewhere. Renewed concerns about corporate governance add to existing challenges, including high valuations and slowing earnings growth, prompting investors to stay away from the Indian market. Foreign investors have withdrawn $14 billion from Indian equities since October.

Green energy stocks turn red on Adani probe

Stocks of renewable energy producers and equipment makers dived on Thursday after the US indictment of Gautam Adani, alleging his involvement in a scheme to bribe officials at India’s solar energy body. Investors are now concerned that other firms in the sector may have engaged in similar practices to win contracts from the Solar Energy Corp. of India. NTPC shares tumbled 3%, while the recently listed Waaree Energies tumbled 6%. Even if these fears are overdone or unfounded, expensive valuations could deter bargain hunters from stepping in. 

Housing and home decor see diverging trends

Housing sales are strong, which is good news for home decor companies. However, the impact appears uneven across the sector. According to Nuvama, pipe makers are seeing strong demand from from agriculture, housing and infrastructure. Wood panel makers, too, are doing well but are hurting from high timber costs and an oversupply in the domestic market. Meanwhile, tile makers face weak export demand, prompting them to offload inventory in the local market, leading to a supply glut. 

 Analysts actions:

Three great reads from Bloomberg today:

And, finally.. 

The US prosecutors’ indictment marks an enormous setback for Gautam Adani, coming just as his businesses were recovering from last year’s damaging short-seller report by Hindenburg Research. Thursday’s slump in the group’s shares erased recent wealth gains, with Adani’s net worth sinking by as much as $15 billion, according to the Bloomberg Billionaires Index. His fortune now stands at around $72 billion, down from $84.3 billion at the end of 2023 and a June 3 peak of $122 billion.

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--With assistance from Alex Gabriel Simon, Advait Palepu and Kartik Goyal.

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