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RED ALERT: Indian Melt-Up

Once again, what is perceived as bullish has more to do with what happened in the past than what happens next. For some reason we see this line of pump and dump reasoning over and over and over again across every market. Bulls celebrating the influx of capital into a dead-end rally.

The largest Indian Tech stocks just added $22 billion of market cap in the past two days:

"Shares of Wipro Ltd. rallied as much as 14% on Monday, their biggest intraday gain since July 2020"

"While global firms’ discretionary spending on technology projects is yet to show firm signs of a pickup or return to past levels, the companies continue to push ahead with initiatives"

FR Commentary:

Recall that at the end of 2022 Adani Industries was at all time highs and the founder, Gautam Adani was celebrated as Asia's richest man. After a disastrous start to 2023 amid allegations of rampant fraud, he has now recovered his mantle as Asia's richest man, even though his stock has yet to fully recover.

It's this type of exuberant hubris in a week that begins the global Davos WEF confab that leads to a totally unexpected repricing of global risk.

Below in this chart we see the Adani main holding company along with the highly speculative "Nifty Jr." Indian stock index. What I "speculate" is happening is that overall positive market sentiment is dragging Adani along for the ride. Which means that for now the fraud that was evident last year has been "forgotten".

And it will more than likely soon be "remembered".

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