India-Canada tension: Share Market Impact

• Stocks like Kotak, SBI Life, PayTM, Zomato all become primary candidates for a fall
• Shares of Kotak Mahindra Bank Ltd, Zomato, Paytm and other companies with significant investments from Canada Pension Plan Investment Board (CPPIB) declined as the fresh tensions between India-Canada relationship escalated.

Canada Pension Plan Investment Board is the largest pension manager in Canada and has significant holdings in some of the Indian companies. CPPIB disclosed an investment of $21 billion ( ₹1.74 lakh crore) in India about a year ago.

Its major holdings in the Indian stock market include a 2.68% stake in private sector lender Kotak Mahindra Bank and stakes in approximately 70 other Indian publicly traded firms. Kotak Mahindra Bank shares were trading 1.82% lower at ₹1,757.55 apiece on the BSE.

CPPIB also holds over 20.35 crore equity shares of Zomato aggregating to a 2.37% stake in online food delivery aggregator, as of June 2023. Zomato shares were trading 0.75% lower at ₹99.21.

The Canadian fund held 4.38 crore Delhivery shares, which aggregates to 6% shareholding in the company. Delhivery share price was down 0.17% at ₹429.70.

Additionally, CPPIB holds 2.18% stake in Indus Towers, 1.76% stake in One 97 Communications, the parent company of fintech giant Paytm and a stake of 1.47% in FSN E-Commerce Ventures, the parent company of Nykaa.

Indus Towers shares declined 1.71% to ₹178.65, Paytm shares fell 1.28% to ₹842.20, while Nykaa share price was trading 2.47% lower at ₹141.95 apiece on the BSE.

As tensions between Canada and India continue to rise, Jayden Ong, Senior Market Analyst, APAC, Vantage believes the Indian market will be indirectly affected

“Canadian pension funds such as CPPIB and CDPQ are the largest institutional investors in companies and projects in industries such as energy, infrastructure, and banking in India. Currently, India's economic system continues to expand, with GDP rising to 7.8%, and the Purchasing Managers Index also rising to 58.6. It is expected that the Indian market will continue to be active and will not be affected by this information," said Ong.

India-Canada relations hit rock bottom after Canada on Monday expelled a top Indian diplomat as it investigates what Prime Minister Justin Trudeau called credible allegations that the Indian government may have had links to the assassination in Canada of a Khalistani terrorist, Hardeep Singh Nijjar.

India also instructed a senior Canadian diplomat to leave the nation in five days.

Amid the ongoing row, Sukhdool aka Sukhu Duneke was killed in inter-gang violence in Canada on Wednesday night. He was a part of the Khalistan movement in Canada.

Meanwhile, the Indian stock market indices crashed for the second day in a row following weak global cues. The Sensex was down 551.35 points, or 0.83%, at 66,249.49, while the Nifty 50 declined 156.25 points, or 0.79%, to 19,745.15.

Source: https://www.livemint.com/market/stock-market-ne...