- U.S Markets closed higher yesterday.
- Asian markets are higher.
- SGX nifty is up 150 points.
- Yesterday was a very tricky and unexpected session.
- As soon as Market opened there was a continuous selling.
- Market was falling left , right and center without taking any support.
- I was wondering why is the Market going against the global cues
- Then we got the news about RBI Governer press conference.
- So some informed people already knew about this rate hike.
- Hence there was a sudden selling in the markets.
- RBI hiked repo rate by 40 basis points and Cash Reverse ratio by 50 basis points.
- Repo rate is the rate at which banks borrow money from RBI.
- When the rate is increased banks borrow money at higher cost and in turn loans also get costlier.
- This slows down the growth and liquidity in the Market temporarily.
- Cash reserve ratio is the interest free deposit money which banks have to keep with RBI.
- RBI uses that money without having to pay any interest on it.
- Increasing CRR means RBI is trying to curb liquidity in the Market.
- Banks keeping more money with RBI means lesser loans in the economy leading to lot less liquidity.
- Sudden decision of rate hike has spooked the markets.
- When RBI knows it's negative for market and economy in the short run , why go for it then?
- The reason is inflation.
- When people have more spending capacity the seller controls the price as there are many buyers for one seller
- Fed had prepared markets well in advance for the rate hike.
- That's the reason even after the rate hike Dow rallied 1000 points.
- It was totally a bad decision by RBI yesterday to give a shock ahead of LIC IPO.
- Nifty might Trade between 16600 to 16900 today.
- stockmarketadvisory.in
1. U.S Markets closed lower on Friday. 2. Dow Jones was flat. 3. Nasdaq was the underperformer. 4. Gift Nifty is down 30-40 Points. 5. Asian markets are mostly lower as well. 6. Friday the Nifty opened with a gap down of 200 points. 7. Within the next 10 minutes , Nifty recovered 100 points. 8. Bulls expected recovery is on the cards but Nifty started to Crack. 9. Bank Nifty was holding up Nifty for most of the while. 10. It couldn't be able to provide much of a support and Bank nifty also began to correct. 11. The issue now is market has had vertical rallies. 12. One way quick rallies so now the downfall will also be vertical. 13. When markets go up quick , they come down quicker. 14. Infy dragged the mood and also HUL didn't post extraordinary results so it was also a laggard. 15. Banks tried hard to hold the markets but couldn't. 16. Over the weekend , AU Bank and icici bank reported very good numbers. 17. These banks have already rallied a lot before results
Comments