By Ambar Warrick
Investing.com — Indian stocks fell Wednesday after weighing losses in the Adani Group after short seller Hindenburg raised concerns about the conglomerate’s debt position as broader Asian markets rallied amid continued bets on a Chinese economic recovery this year.
Indias and indices fell 1.1% and 0.9% respectively, with members of the Adani Group weighing the heaviest after , leaving it susceptible to a sharp drop in valuation.
Adani Ports and Special Economic Zone Ltd (NS:) performed the worst of the seven listed Adani firms, declining about 6.3%, while Adani Enterprises Ltd (NS:), Adani Total Gas Ltd (NS:) and Adani Wilmar Ltd (NS:) fell between 2.8% and 5%.
Hindenburg also accused India’s second largest conglomerate of fraud and stock manipulation. The company has a total value of more than $200 billion and its seven units make up a large part of the Indian stock markets.
Wider Asian markets were up, although volumes remained contained due to a week-long Chinese market holiday. Japan’s index rose 0.4%, while South Korea’s rose 1.4%.
Markets are betting that a week-long holiday in China will boost economic growth enormously, especially after the country lifted most of its anti-COVID measures and reopened its borders after three years of lockdowns.
A recovery in China’s economy is widely expected to spill over to the rest of Asia, given the country’s role as a major trade destination for the region. Chinese equity markets have risen sharply over the past two months, as have most markets exposed to China.
Most Southeast Asian markets, which are also heavily exposed to China, rose slightly on Wednesday.
On the other hand, the Australian index fell 0.3% after data showed Australia grew more than expected in the fourth quarter and held on to a 32-year high.
The reading heralds more pressure on the Australian economy from higher price pressures and is also likely to lead to more interest rate hikes from the , which is likely to weigh on local equities.
Broader markets are also concerned about a possible global recession this year, due to weak economic pressures from the US and the Eurozone. The focus this week is on US data, which are expected to show a slowdown in growth.