Adani impact? UK overtakes India as world’s sixth-biggest equity market after 9 months, says report
The UK has surpassed India as the world’s sixth-largest equity market for the first time since May 2022 as a weaker pound boosts appeal of exporters and jitters over Adani-Hindenburg row are being felt across Indian markets, said a report on Wednesday.
The combined market capitalisation of primary listings in the UK, excluding ETFs and ADRs, reached about $3.11 trillion on Tuesday, $5.1 billion higher than their Indian equivalents, which hasn’t happened since May 29, 2022, said Bloomberg.
UK’s FTSE 350 Index — which comprises stocks in the FTSE 100 and the domestically focused FTSE 250 — has gained 5.9% so far this year. Meanwhile, Nifty 50 has fallen 3.5% so far in 2023.
India’s equity market is facing a double whammy of a weaker rupee and the massive fallout of the stock rout being witnessed by Adani Group firms ever since US-based short-seller Hindenburg Research released a scathing report against the conglomerate.
The January 24 report by Hindenburg Research alleged the conglomerate improperly used offshore tax havens and manipulated stocks, which the conglomerate denied. The report also flagged concerns over its high debt levels. The listed Adani stocks lost a combined market capitalisation of over whopping $140 billion due to the damning report by Hindenburg.
Adani has repeatedly denied the claims and has also cut expenses and repaid debt as he seeks to calm traders concerned about the group’s access to financing.
BSE’s m-cap stood at Rs 261 lakh crore on Wednesday, after losing over 4% m-cap to Adani stock rout since late January.
“The negative Adani headlines have caused some concerns among international investors, but they’re mainly focused on the group,” Jian Shi Cortesi, a fund manager at Zurich-based GAM Investments told Bloomberg. “This could cause investors to be more selective in India, but we are not seeing investors avoiding Indian stocks in general.”
Benchmark Sensex tanked 927 points while the broader Nifty settled at a four-month low on Wednesday due to an intense selling in heavyweight stocks triggered by geopolitical and inflation concerns.
Losses in global equities and across-the-board selling ahead of the monthly expiry of derivatives also hit the investor sentiment, dragging down the key indices for a fourth straight day.
The BSE Sensex tumbled 927.74 points or 1.53 per cent to settle at 59,744.98, the lowest closing level since February 1. As many as 29 of the Sensex stocks declined. During the day, it tanked 991.17 points or 1.63 per cent to 59,681.55.
The 50-issue NSE Nifty declined 272.40 points or 1.53 per cent to end at a four-month low of 17,554.30 with 47 of its constituents ending in the red.
With inputs from PTI
