Hindenburg Allegations: Market Likely to React Immediately on Monday Following New Allegations Against Sebi Chief

Ravi Singh

Hindenburg Allegations: New Allegations Against SEBI Chief Madhabi Puri Buch and Her Husband by US Short Seller Could Impact Benchmark Nifty-50 and S&P BSE Sensex, Experts Predict Possible Lower Opening on Monday.

Hindenburg-Adani Case: The Benchmark Nifty-50 and S&P BSE Sensex, which have been volatile over the past week, may experience further impact on Monday due to fresh allegations by the US short seller firm against SEBI Chief Madhabi Puri Buch and her husband Dhaval. Market experts anticipate a potential knee-jerk reaction, with possible initial weakness in trading.

Experts suggest that investors and traders should prepare for increased volatility, with some weakness in early trades on Monday not being ruled out. Ambareesh Baliga, an independent market expert, noted that while some impact is expected, it will be crucial to observe if fresh buying emerges at lower levels to provide market support.

The advantage, according to the Head of Retail Research at a domestic brokerage who requested anonymity, is that the allegations by Hindenburg against SEBI Chief Madhabi Puri Buch and her husband Dhaval surfaced over the weekend when markets were closed. This timing may help mitigate the immediate negative impact on investor sentiment. As the allegations were made on Saturday night, any adverse effects may be lessened by Monday’s market open. However, the expert cautioned that some impact is still likely. The market will need to be monitored closely for further reactions, including potential noise from opposition parties and other influencing factors.

Sebi Chief Dismisses Allegations as Baseless, Supported by Other Experts

The US firm Hindenburg, known for its previous allegations against the Adani Group, has now implicated SEBI Chairperson Madhabi Puri Buch and her husband Dhaval Buch in the latest episode.

In response to the allegations presented in the Hindenburg Report dated August 10, 2024, SEBI Chief Madhabi Puri Buch stated, ‘We strongly deny the baseless allegations and insinuations made in the report.

Many experts and industry veterans have also rallied in support of SEBI Chief Madhabi Puri Buch, labeling the Hindenburg allegations as baseless. Mohandas Pai, former CFO of Infosys and a notable industry commentator, has publicly endorsed Buch and criticized Hindenburg Research.

In this context, some experts believe that while a knee-jerk reaction may occur, the market could stabilize on Monday.

G. Chokkalingam, Founder & Head of Research at Equinomics Research Pvt Ltd, views the Hindenburg statements as mere accusations. He suggests that these allegations are unlikely to affect the overall growth story or earnings of companies, and thus stocks trading at reasonable valuations may remain unaffected. However, in the event of a market correction, mid-cap and small-cap stocks, particularly those trading at high valuations, could experience a greater impact, according to Chokkalingam.