Investor reaction to Adani market rout after short-seller report

"Indian shares were trading at a premium last year and that premium is now at risk as investors realise maybe the underlying fundamentals are not as strong as many thought. Adani may have started a confidence crisis in Indian shares and that could have broader market implications.""It made sense to cancel the new issue since in all probability it would not have been successful in view of the negative news.

"Everybody's keeping a very close eye on debts. But on the domestic debt side, we hardly see any impact on the broader corporate bond market... In the domestic market, it’s not widely held, except for banks and banks do not mark-to-market and so we will not know the real impact until the debt comes due.""I think it's possible that there could be a bit of systemic risk.

"I think the greatest challenge right now is on the stock market and how to prevent the share price from tumbling and the immediate requirement is to support, either through media or through other investor base, for the stock market to put some kind of floor.

"The weighting-risks are similar to the large weighting of Samsung in the Korea Index... index will need to impose a single stock cap going forward.""The Adani incident looks to be an idiosyncratic event and the contagion so far looks to be limited with the exception of some names in the financial sector. Given there has not been any significant change for now for the market valuation, the market remains overall expensive in our view.

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