Winter Winds, Reliance Revival & Adani Turmoil

As winter descends on the financial capital, traders are hoping to avoid a similar chill in the stock market. GIFT Nifty futures are trading 20 Points up, reflecting the subdued sentiment in Asia this morning. Key focus areas include Adani stocks, with its flagship hitting a one-year low, and Reliance Industries, which analysts are betting on for a comeback.

Reliance Industries: Ready for a Rebound?

Analysts at Citigroup Inc. and Jefferies Financial Services are optimistic about Reliance Industries, highlighting a strong case for recovery. Citi recently upgraded the stock to 'buy,' while Jefferies sees the current risk-reward as highly favorable. The stock has declined 20% since its July peak, and history shows investors often profit at these valuation levels. With 85% of analysts recommending a ‘buy,’ the highest this year, Reliance’s recovery is also key for Nifty to surpass resistance levels.

Adani Group: Facing a Domino Effect

Adani’s flagship stock plunged to a one-year low, erasing its recent gains as fallout from bribery allegations against its founder continues. Negative outlooks from S&P, Fitch, and Moody’s are adding to the pressure, potentially complicating fundraising efforts. These challenges appear more severe than the Hindenburg crisis earlier in 2023. The group has now lost $100 billion in market value across its 10 companies, extending losses since June’s pre-election rally.

FMCG: Mixed Signals Amid Winter Delays

The Nifty FMCG index gained for the third consecutive session on Tuesday, marking five advances in six sessions. However, demand remained weak in October, with the festive season underwhelming consumers. Antique notes that a delayed winter has further impacted the stocking of seasonal products. Despite this, Godrej Consumer Products, Marico, United Spirits, and Radico Khaitan remain Antique's top picks in staples and alcoholic beverages.

Analyst Recommendations

• Coal India: Rated Overweight at Morgan Stanley; Price Target ₹525

• Emcure Pharma: Upgraded to Buy at Kotak Securities; Price Target ₹1,680

• L&T Finance: Upgraded to Add at Kotak Securities; Price Target ₹160

Domestic Investors Power Record Inflows

Indian investors have poured over $70 billion into local stocks this year through October, setting the stage for an annual record. Retail investors, including non-residents, contributed $17 billion to NSE trades. Much of this liquidity has been absorbed by IPOs and founder share sales, underscoring robust domestic confidence even as global funds pull back. Sagar Chaudhary