Sign Of Confidence In Sebi? Nifty, Sensex Up On Day 1 After Latest Hindenburg Report

Indian markets appeared to have signalled their confidence in Sebi Monday morning, 12 August, after a weekend of allegations against the regulator in general, and its chairperson, Madhabi Buch, in particular. 

At the time of writing, the Sensex was up by 146 points and Nifty by 35. 

This ascent of both these indices signals no change in the attitude of market--institutional and retail investors--towards Sebi. 

After the Hindenburg report on Saturday targeting the Sebi chairperson specifically, there were apprehensions about how markets would react since the credibility of the market regulator was itself under attack.

To add it was the Leader of Opposition, Rahul Gandhi’s video statement of 11 Aug talking about the 'Umpire being compromised' and asking why Buch had not resigned from her post as yet. 

The fear was that since the reputation of the Indian market regulator was itself under fire, it would damage the credibility of the Indian markets, and investors would react accordingly by withdrawing money, leading to a market fall.

The contrary happened. Sensex and NIFTY numbers show a market gain—an indication that markets continue to have confidence in Sebi and in the government at large. 

Another positive takeaway from the day’s trading is that investors’ response showed that Indian markets are not given to reflex, panic reactions. 

What is the latest Hindenburg-Adani issue?

On the intervening night of 10-11 August, American short-seller Hindenburg claimed in a post that the Sebi chairman Madhabi Buch and her husband had unscrupulous links with the Adani group. This was followed by an immediate, short denial by Buch and her husband and a detailed rebuttal came later. 

Hindenburg responded to Buchs’ statement before markets opened Monday but it seems to have had little to no effect on investor sentiments.