Adani shares volatile as group rebuts short-seller report, Chinese stocks head for bull market

Adani companies lost billions in market after a short-seller report accused the group of fraud.

Indranil Aditya | Bloomberg | Getty Images

Shares of Adani Enterprises rose 10% after seeing sharp-losses in the previous sessions as its Chief Financial Officer voiced confidence in its follow-on public offering that is slated to close on Jan. 31.

The stock is is still down more than 20% in the first month of the year.

It could take a decade for China to catch up on advanced chip tech, as The Netherlands and Japan join the U.S. in enforcing curbs, Daniel Newman, founding partner and principal analyst of Futurum Research, told CNBC’s “Street Signs Asia” Monday.

The two advanced semiconductor equipment makers agreed Friday to join the U.S. in restricting exports of some chipmaking machinery to China, Bloomberg reported.

One top China supplier is Dutch firm ASML, which manufactures deep ultraviolet (DUV) lithography systems needed to manufacture the most advanced chips.

Its CEO Paul Wennink had said China accounted for around 15% of sales in 2022.

“The advanced lithography machines that are made by ASML are some of the most advanced in the world. This is not something that some other company can just start to make. It’ll probably take a decade if China really puts its mind to it,” said Newman.

– Sheila Chiang

Adani Group’s chief financial officer Jugeshinder Singh said on Monday that he is confident Adani Enterprises‘ follow-on public offering will be fully subscribed.

The $2.5 billion secondary share sales were overshadowed by a rout of roughly $48 billion as the conglomerate’s affiliates stock prices plunged for a second consecutive session after short seller firm Hindenburg accused the group to be “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.”

Singh said in an interview with CNBC-TV18, an affiliate of CNBC, that the value of Adani Enterprises has not changed “simply because” of share price volatility, adding it instead lies in its “ability to incubate new businesses.”

He added the Hindenburg’s report is “simply a lie,” and that the timing of the report was “malicious.”

The Adani Group published a lengthy response of over 400 pages to Hindenburg’s report over the weekend, saying that it will exercise its rights to “pursue remedies” to safeguard its stakeholders “before all appropriate authorities.”

Hindenburg on Monday morning called the group’s response “bloated” and claimed it “ignores every key allegation” against the conglomerate that it raised.

— Jihye Lee

A batch of economic data will be released this week in the Asia Pacific, as the U.S. Federal Reserve kicks off its two-day FOMC meeting off on Tuesday. The central bank will announce its interest rate decision on Wednesday when the meeting concludes.

China’s National Bureau of Statistics releases its Purchasing Managers’ Index on Tuesday, with economists polled by Reuters expecting to see a reading of 49.8, slightly below the 50 mark that separates growth from contraction.

Japan’s unemployment and industrial production prints are also scheduled to be published the same day. South Korea’s industrial output readings will also be released.

On Wednesday, Malaysia observes a market holiday while Indonesia is slated to release its latest inflation data.

Australia’s building approvals print and South Korea’s inflation reading will be released on Thursday.

On Friday, Hong Kong will publish its latest retail sales data.

— Jihye Lee

Oil prices could approach $100 per barrel in the second half of the year, according to RBC Capital Markets’ Michael Tran.                         

“The bottom line here is that China is going to be buying a lot of crude over the course of the next several months,” he said.

Brent crude futures last traded flat at $86.85 a barrel, while the U.S. West Texas Intermediate futures inched up 0.09% to $79.75 a barrel.

Investors and OPEC+ will also be waiting to see if EU’s embargo on Russian oil products, which kicks in this Sunday, will lead to any major disruptions. The oil cartel is not expected to make any real changes to their quotas or production guidance in an upcoming meeting, Tran forecasts.

—Lee Ying Shan

China’s CSI 300, which tracks the largest mainland-listed stocks, is poised to enter a bull market as trade resumes later in the day.

The CSI 300 rose 19.18% from its lows seen on Oct. 31, according to Refinitiv data. It ended its last trading session at 4,181.53 on Jan. 20.

A bull market is defined as a market period where stocks have increased at least 20% from its recent lows.

The ChinaAMC CSI 300 Index ETF, which tracks the performance of the index, was last up 23% from its October lows.

All the major averages capped off a winning week on Friday.

For the session, the Nasdaq Composite jumped 0.95% to settle at 11,621.71, while the S&P 500 gained 0.25% to close at 4,070.56. The Dow Jones Industrial Average added 28.67 points, or 0.08%, to finish at 33,978.08.

— Samantha Subin

Consumer sentiment data from the University of Michigan for January came in stronger than anticipated.

January’s reading came in at 64.9, slightly above the consensus estimate of 64.6 from economists polled by Dow Jones. The index quantifies the view of current and future economic conditions.

— Alex Harring

Almost two thirds of the 13 stocks in the S&P 500 that touched 52-week highs in early Friday trading were also trading at all-time highs. The list is broadening out from the energy/materials/resources focus of recent days. One of 13, Caterpillar, is also in the Dow Industrials.

• BorgWarner (BWA), highest since Jan. 2022
• Las Vegas Sands (LVS), highest since June 2021
• Starbucks (SBUX), highest since Jan. 2022
• Ulta (ULTA), all-time high back to 2007 IPO
• Wynn (WYNN), highest since Sept. 2021
• Marathon Petroleum (MPC), all-time high going back to MRO spinoff in June 2011
• Arthur J Gallagher (AJG), all-time high back to 1984 IPO
• Chubb (CB), all-time high
• Caterpillar (CAT), all-time high back to 1929 NYSE listing
• General Electric (GE), highest since Nov. 2021
• TransDigm Group (TDG), all-time high back to 2006 IPO
• United Rentals (URI), all-time high back to 1997 IPO
• Steel Dynamics (STLD), all-time high back to 1996 IPO

Other notable highs outside the 500:

• Churchill Downs (CHDN), highest since Oct. 2021
• Lennar (LEN.B), highest since Jan. 2022
• NOV (NOV), highest since Jan. 2020
• Axis Capital (AXS), highest since Feb. 2020
• HEICO (HEI), all-time back to 1960 IPO
• Knight-Swift Transportation (KNX), highest since Jan. 2022
• Lincoln Electric Holdings (LECO), all-time high back to 1995 Nasdaq listing
• Allegro MicroSystems (ALGM), highest since Jan. 2022
• Fair Isaac (FICO), all-time high back to 1986 NYSE listing
• Reliance Steel & Aluminum (RS), all-time high

— Scott Schnipper, Christopher Hayes

Tesla shares have surged more than 33% this week, putting the electric vehicle stock on pace for its best weekly performance since the week ended May 10, 2013, when it surged 40.72%.

If Tesla closes at these levels it would mark the stock’s second-best weekly performance ever. As of 12:40 p.m. EST shares traded about 33.8% higher on the week.

The gains in Tesla shares follow the company’s latest earnings report, which showed record revenue and an earnings beat. Shares surged more than 11% Friday.

The sharp uptick in Tesla’s stock comes after shares plummeted 65% in 2022 and suffered their worst ever month, quarter and year.

Gains in Tesla also boosted the S&P 500’s consumer discretionary sector by more than 2%.

Tesla is on pace for its best week since May 2013