Gurmeet Chadha warns of systemic market risks from 'source-based news'. Suggests remedy to tackle 'disinformation'

Market veteran Gurmeet Chadha has raised concerns over the growing spread of unverified or source-based news, especially on expiry days, warning that such disinformation can trigger disorderly market movements and pose systemic risks.

In a post on X, Chadha pointed to a series of market-moving claims that surfaced this week, including reports about sanctioned Russian oil shipments to India and Chinese contractors being allowed to bid for government contracts. He noted that these reports were circulated by global social media handles, often citing unnamed sources.

Chadha also flagged claims that former US President Donald Trump had approved 500% tariffs on India, calling them misleading. “Too much disinformation,” he said, adding that such rumours tend to surface frequently around weekly or monthly derivatives expiry sessions, amplifying volatility.

"Tuesday News on sanctioned Russian oil headed to India. Today on Chinese contractors being allowed to bid for Govt contracts. All by global handles & quoting some sources.. Also usually such news comes on weekly/ monthly expiries. Some handles spoke of 500% tariffs approved on India by Trump. Too much of disinformation...," the Complete Circle Consultants' Managing Partner and CIO said.

Shares of Bharat Heavy Electricals (BHEL) and other capital goods plunged up to 14% on Thursday following a media report that said that the Ministry of Finance plans to scrap five-year-old restrictions on Chinese firms bidding for government contracts. Reuters reported, citing two sources, that the move may come as the government seeks to revive commercial ties with the dragon nation amid eased diplomatic and border tensions.

To address the issue, Chadha suggested that the government should consider setting up an official social media handle to communicate promptly and counter false or misleading information. Such a mechanism, he said, could help clarify facts in real time, improve transparency and reduce the scope for panic-driven trading.

"Suggest govt shud have a SM handle to communicate & tackle this.. can create disorderly movements & eventually systemic risks..," Chadha said.

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