Indian shares fall as Adani stocks hurt, insurers slip

BENGALURU - Indian shares declined on Thursday as the week-long rout in Adani Group stocks persisted, erasing $100 billion in market value, while insurers fell on a budget tax proposal that would dent the appeal of high-value life insurance policies. The negative sentiment offset a jump in IT stocks, which gained more than 1% on dovish comments by U.S. Federal Reserve Chair Jerome Powell. The Nifty 50 index fell 0.11% to 17,599.65, while the S&P BSE Sensex rose 0.09% to 59,773.50, as of 11:35 a.m. IST. Thirty of the Nifty 50 constituents fell. "The sentiment in the markets has been badly hurt due to the ongoing sharp selloff in Adani stocks," said Yogesh Nagaonkar, founder and CEO of Rowan Capital Services. There is no other reason for the slide, Nagaonkar underlined, pointing to the positive Fed commentary and the federal budget that was largely along expected lines. Adani stocks extended their slide after the group decided to call off the $2.5 billion follow-on public offering, which was fully subscribed. The stocks have been facing steep losses since the Hindenburg report on Jan. 24, which raised concerns over the group's financials. India's market regulator is examining the crash in Adani company shares and looking into possible irregularities in the secondary share sale of flagship Adani Enterprises, Reuters reported, citing a source familiar with the matter. Adani Enterprises and Adani Ports were the top losers on Nifty 50, falling 7.6% and 3.6%, respectively, followed by HDFC Life, which lost 4.82%. High weightage financials tumbled 1% after the Indian government proposed a tax on the total returns upon maturity of life insurance policies issued on or after April 1, 2023, if the aggregate premium is more than 500,000 rupees ($6,108.55) a year. Wall Street equities advanced overnight after the U.S. Federal Reserve raised the interest rate in line with an expected 25 basis points and said it had turned a key corner in the fight against high inflation. Fed commentary hints at a soft landing for the world's largest economy, setting the stage for a 25bps rate hike by the Reserve Bank of India in its monetary policy meeting next week, two analysts said. Asian markets advanced, with the MSCI's broadest index of Asia-Pacific shares outside Japan rising 0.74%. ($1 = 81.8525 Indian rupees) (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman, Eileen Soreng and Dhanya Ann Thoppil)

Indian shares fall as Adani stocks hurt, insurers slip

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