Stock Market: War of fund houses on foreign versus desi mat
By S Jha
New Delhi, January 30: Did the foreign institutional investors know in advance about the contents of the short-seller Hindenburg Research report on the Adani Group of Companies? The FII actions in the Indian equity markets drop hints that they could have possibly been aware of the contents of the report of the short-seller, which wiped out billions of dollars from the equity valuation.
A day after the Adani Group came out with an exhaustive rebuttal of the Hindenburg Research report, there were signs that the battered scrips from the house of Gautam Adani will stage a comeback. But they came under ferocious shorting by the foreign participants. The Adani midcaps sank by 20 per cent, while the two largecaps Adani Port and Adani Enterprises gave up the 10 per cent upper circuit in the morning to trade lower. Adani Gas, Adani Transmission and Adani Green have been smashed in the last three days of trading sessions.
While the FIIs began shorting India in their bids to rebalance by investing in China, reports are emerging that the switch may be almost getting over. Yet, the FIIs are not yielding from shorting India. On Monday, they sold a net of Rs 6793 crores, a level not seen for several months, maybe only in 2020. But the Adani Group in its rebuttal had harped on the theme that the attack on its group companies is an attack on India’s growth and her ambition. The domestic fund houses looked supporting the arguments of the Adani Group, as they brought in a net of Rs 5513 crores to negate the impact of the FII action. The domestic institutional investors thus retrieved the Indian indices from the day’s lows to turn them positive by the end of the day. The DIIs, so, scored a point over the FIIs by rescuing the Indian equity markets ahead of the unveiling of the Union Budget on February 1.
The banking stocks have been reeling under the bear action even since the Hindenburg Research report became public with the likes of the State Bank of India, ICICI bank, Axis Bank tanking to their lows of at least two months. The IndusInd Bank was also battered on Monday. The banking scrips are likely to stay under pressure as long as Adani scrips are hammered by the shorters.
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