This day was dreaded on the weekend as the Hindenburg report, or as I call it, the “hidden bug,” came out. People were extremely scared when the rumor spread that a big expose was imminent, which would crash the markets and create widespread panic. However, it seems that the claims made by this company have so far been comprehensively rejected by the market, which has continued its stride without much concern.
Market Overview
The markets remained extremely range-bound. Nifty closed at -0.08%. It did go higher than in the previous days, but it couldn’t sustain those gains and ended up closing 0.08% down from the previous session. You can see here that the last six sessions have shown a decreasing range. Today, the range was higher than yesterday, but the market is neither willing to go further down nor up, preferring to consolidate instead. There are no clear clues from the market yet. Despite the big fear heading into the morning trade, the market opened slightly lower, dropped further, recovered fully, went into positive territory, and closed at even. This indicates that the market is indecisive—not willing to go down but not inclined to go up either.
Nifty Next 50
Nifty Junior also exhibited a doji candle, closing at -0.39%, indicating indecision in the market.
Nifty Mid and Small Cap
Mid caps, however, were slightly in the green, closing slightly higher at 0.27%. The gap between where mid caps have closed and this gap is now less than 300 points, which could potentially be covered in one session. If that happens, it would give a lot of confidence to the mid-cap segment of the market. Small caps were similar to mid caps, closing at +0.3%. They slipped in the morning but recovered without filling the gap, reflecting tentativeness but also buying at dips. Again, this is a region of consolidation.
Nifty Bank Overview
Bank Nifty is also consolidating, not really moving up or down, closing at 0.19%. T
Nifty Heatmap
The heat maps were mixed. ONGC performed well due to the government announcing higher pricing for gas sales for ONGC and Oil India Limited, which rose by 2.63%. Infosys went up by 1.5%, Axis Bank by 1.9%, and NTPC lost 2.3%. These were the major movers of the day. Adani stocks initially moved down sharply in the morning but recovered to some extent, with some not fully rebounding. LIC lost significant ground as other companies rapidly gained market share. HDFC Life was flat today, but there was news of remarkable premium growth.
IRFC, RVNL, and several rail stocks performed well today. The MSCI index will be adjusted, and stocks like Dixon and RVNL may see good inflows due to weight increases. Adani Total Gas and Adani and Salt didn’t fully recover from their drop, while Adani Power did, and Adani Green even showed some gains. GAIL India also rose by 1.99%. Trend post its result last week was also doing well. Many large caps like Varun Beverages, Godrej Consumer Products, United Spirits, and Pidilite lost ground today, along with ABB. It was a very mixed bag, with no clear trend.
Sectoral Overview
Sectoral trends showed that, besides real estate, which did well today, and PSU banks and FMCG, which didn’t, others were around ±1%. Last week, no sector was in red, which is a positive sign, with most weekly losses recovered. For the monthly losses, there’s still room to go, but last week’s loss has been fully made up. PSU banks lost the most at 1.2%.
Sectors of the Day
Nifty REALTY Index
Real estate closed at a five-day high and looks promising going forward.
Stocks of the Day
Ola Electric
Ola Electric was in the spotlight with two consecutive sessions of 20%+ gains. Yesterday’s session hit the 20% circuit, and today it opened with a huge gap up and gained another 20%. Somebody is clearly accumulating big on Ola. It opened at 77 and is already at 109, showing quite an amazing start.
Voltas
Voltas was also up by 10.7%, clearing out all resistances at a new high, making it a strong candidate for long setups as there is no further resistance. On a monthly basis, Voltas has done exceptionally well after a brief hiatus of a couple of years.
Story of the Day
Coming back to the “hidden bug” report, it has been largely rejected by the market. They released a feeler on August 10th, claiming something big was coming soon in India. It felt almost like the 8:00 PM demonetization announcement. Hiddenburg is now associated with some kind of explosive revelation. Last time, in February 2023, they caused significant market damage, and those memories came back quickly for most people. The documents they submitted reveal that SEBI chairperson had some stake in an offshore entity, which was also used by someone else but never invested in Adani stock. It’s a muddled investigation report, trying to create links where there aren’t any. I’m not taking any sides here, but this feels like an attempt to destabilize our economy. Who is behind this? Is it George Soros? Rahul Gandhi? I don’t know. But there seems to be a force trying to destabilize something. Whether Adani stocks have benefited from government policy or not, there have been investigations, including by the Supreme Court, so everything is out in the open. If they have concrete evidence, they should present it. Alleging that the SEBI chief invested in a fund also used by someone else is a silly accusation.
There was significant damage done in the morning, with 53,000 crores being locked, but many stocks recovered. Some remained in the red, but most losses were recovered. The report doesn’t have any fresh charges against the Adani group, and the allegations are now against the SEBI chief and her husband, claiming they had stakes in some offshore fund, which is not a crime. The fund was also used by Adani’s brother to have some positions in Adani Group. It’s unclear what correlation they’re trying to make, but they haven’t convinced those reading the report. The allegations range from conflict of interest to favoring REITs where the husband was working, to a consultancy business connection, and not severing ties with the consultancy firm after becoming SEBI chairperson. Proper responses have been submitted by the SEBI chief and the SEBI institution. They’re not just attacking the chairperson; they’re attacking the institution. After the damage done last time and the Supreme Court clearing all investigations, this feels vindictive.
SEBI can’t do much as these entities are beyond their jurisdiction. They can continue saying or doing whatever they want, trying to create uncertainty and damage trust in the regulatory institution. But I’m pleased the market didn’t take it too seriously and responded maturely. Yes, some selling occurred in the morning, but it wasn’t panic selling. Many prominent names, like Vijay Kedia, have also come out, calling it a blackmailing plan that has failed. If you look at Nifty from January 2025, when they launched their report, and how it impacted the market back then, we’ve come a long way since. They’re now trying to do more damage, possibly politically motivated, or maybe not. But it does seem very motivated for them to take such an interest in India.
Our laws should change so that anyone can’t just make any allegation without jurisdiction to take action. If someone takes a short position and then makes an allegation, that’s a very motivated business action. There should be some way to deter that. Adani Enterprises has also recovered from the previous allegations, with a sharp fall after a huge run-up, but over the last year and a half, everything has recovered. Adani Ports, for example, people are thanking Hindenburg for crashing the market so they could accumulate at 500, and now it’s three times that amount. Adani Power is also more than two and a half times since then. Adani Green is above where it was during the previous insinuations by Hindenburg. Adani Total Gas is the only one where significant damage was done, still at 832, but maybe it was overpriced at that point.
In conclusion, always watch what the market is saying and doing. All this narrative is noise. I remember even during the previous episode, we stuck to our rules, and in the last year and a half, we’ve made fantastic returns. There’s no point in panicking. If any news creates a price action that triggers your exit, then you exit. It may be unfortunate that an external force caused it, but you must follow your rules. Today’s mature response from the market is very welcome. I don’t know what will happen in the next few days—if more will come out or if there should be an independent investigation. Yes, there should be, but mere allegations shouldn’t cause damage.
Finally, I have one thing I didn’t like: some political parties were almost celebrating that a foreign entity attacked the Indian economy, hoping it would destabilize us and cause bloodletting among retail investors. That should not be the case. If you’re a political party at odds with the ruling party, that doesn’t mean you should crush people invested for your gain. That part is sinister, and I hope better sense prevails. The market has given a befitting slap to whoever wanted it to crash, and I hope this continues. A mature response to such allegations is crucial. Allegations may warrant investigation, but making millions of people lose their hard-earned money for political gain is unacceptable. I’m extremely happy this event has passed.
