The S&P BSE Sensex experienced a weaker opening on Monday, slipping by 234.35 points to 79,471.56 at 9:22 am, while the NSE Nifty50 also declined, losing 64.50 points to trade at 24,303. This downward trend in the market was largely influenced by unfavorable global cues. However, despite the recent and highly publicized allegations made by Hindenburg Research against Madhabi Puri Buch, the chairperson of the Securities and Exchange Board of India (Sebi), and her husband, these developments are not expected to significantly impact the sentiment on Dalal Street.
The broader market indices reflected this negative sentiment as well, with most indices trading in the red. The allegations by Hindenburg, while contributing to a slight increase in market volatility, have not been deemed as a major threat to the overall market stability. According to Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the market’s direction this week is expected to be shaped more by global and domestic economic indicators rather than the controversy surrounding the Sebi chief.
Dr. Vijayakumar highlighted that global markets are particularly focused on the upcoming US consumer data and core CPI (Consumer Price Index) numbers. These figures are critical as they will provide insight into the current health of the US economy, which in turn will influence global market trends. He also pointed out that the recent stabilization of the yen indicates that concerns over the yen carry trade, a key issue in international finance, have largely dissipated. As a result, the global macroeconomic environment and expectations regarding future Federal Reserve rate cuts are likely to be the primary drivers of market behavior in the coming days.
On the domestic front, Dr. Vijayakumar acknowledged the latest allegations from Hindenburg but suggested that these revelations are unlikely to have a lasting impact on the markets. He noted that the ongoing bull market has been resilient, with investors continuing to adopt a buy-on-dips strategy—a tactic that has proven successful throughout this bull run. This approach is expected to remain effective, as investors appear confident in the market’s overall trajectory despite the negative news.
In response to the allegations, both Sebi and Madhabi Puri Buch issued strong statements refuting Hindenburg’s claims. The allegations arose after Hindenburg received a show-cause notice from Sebi earlier this year, prompting further scrutiny from the short seller. In its defense, Sebi has urged market participants and investors to maintain calm and avoid making hasty decisions based on unverified claims. The regulator has also advised investors to conduct thorough due diligence before reacting to the allegations put forth by Hindenburg.
Overall, while the market started the week on a weaker note, experts believe that the focus will shift back to fundamental economic indicators rather than the controversy, allowing for a potential recovery as the week progresses.
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