Stock Market: Adani black swan brings Satyam fear to bourses

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By S Jha

New Delhi, January 25: What has been stated in whispers was alleged by Hindenberg report, which charged the group headed by Gautam Adani to have committed the largest con in the corporate history to ride a rocket to the peak of the market valuation, taking the Indian equity indices to the abyss. While Adani stocks were hammered and battered, the banking scrips bore the brunt.

The Adani Group, which has been on acquisition and expansion spree on the basis of an enviable leverage business, spread the fear factor among the banking stocks. The likes of the State Bank of India went under the hammer von Wednesday. The Bank Nifty at one time was down by over 1100 points, something not seen for months. Nifty also tanked.

The foreign institutional investors who have been shorting the Indian equities for over two months now once more led the carnage on the bourses, as they sold a net of Rs 2394 crores. Their domestic counterparts continued pumping money into the Indian equities, but were completely overwhelmed by the FII selling. It has been stated earlier also that the FIIs are selling India to buy into the Chinese equities after the Xi Jinping regime abandoned the ‘Zero Covid Policy’. The trend is clear that the foreign funds are shifting to China solely to make quick gains out of the valuation differences. The volatility index spiked by over nine per cent on Wednesday, which was also a weekly and monthly expiry for the options.

Bears have taken confidence from the predictions of Gateway Credit Chief Investment officer Tim Gramtovich who has claimed that 2023 will be a year of equity bloodbath. His analysis is essentially based on assumptions that the high growth will be a thing of fast, as the world economy faces risks of de-globalisation and also the demographic impact. The world economic growth engine in the last four decades came from China, which is battling demographic stress, with population declining, as the economy is struggling to clock even 4.5 per cent annual growth. Similar is the story in Europe which is battling the grey tsunami.

Maruti was among the few stocks which stood tall amid the rout on the basis of steller third quarter result. Tata Motors too came with an extraordinary result in the off-market hour. Maruti, Tata Motors, Mahindra and Mahindra along with the two-wheeler companies are seen to be staying strong even in the sideways market.

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