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On Tuesday, Adani Group stocks witnessed a significant surge, driven by Bloomberg’s revelation that the U.S. government, after a thorough examination, dismissed short-seller Hindenburg Research’s claims of corporate fraud against Indian billionaire Gautam Adani. The scrutiny preceded the approval of a substantial loan, amounting to $553 million, for Adani’s conglomerate, earmarked for a container terminal project in Sri Lanka.
Earlier this year, Hindenburg Research’s damning report had wiped out approximately $100 billion from the Adani Group’s market value. The International Development Finance Corp. (DFC) took center stage in investigating the conglomerate’s affairs, addressing the allegations outlined by the U.S.-based short-seller. A DFC official, requesting anonymity regarding the negotiations, disclosed that the agency was content that the accusations from the short-seller’s report, which branded Adani’s actions as “the largest con in corporate history,” did not apply to Adani Ports & Special Economic Zone Ltd., the subsidiary overseeing the Sri Lankan venture.
Adani Group stocks experienced notable gains, with Adani Green up by 18%, Adani Energy by 12%, Adani Total Gas by 11%, Adani Enterprises by 11%, Adani Ports by 9%, Adani Power by 7%, Ambuja Cement by 6%, and Adani Wilmar by 6%.
The BSE Sensex also marked a fresh high at 69,180 points, rising by 315 points.
While the market witnessed a robust rally on Monday, contributing to a 418-point surge in the Nifty, analysts predict that such fervor may not be replicated in the coming days. Despite this, market experts emphasize the bullish sentiment, noting the significant institutional buying of over Rs 7,000 crore on Monday as a reflection of institutional confidence in the Indian market.
V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the shift in strategy by Foreign Portfolio Investors (FPIs), who have transitioned from sellers to consistent buyers over the last seven days. Institutional confidence, combined with substantial buying in frontline banking stocks, short covering, and reasonable valuations, is expected to maintain strength in this segment.
Looking ahead, Vijayakumar suggests the market has the potential to rise by another 5% in the coming weeks. However, he cautions that beyond that point, stretched valuations may invite corrections in the market.
