- 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
U.S Markets closed higher yesterday. Most importantly , S&P 500 VIX crashed 10%. There was huge Volatility in global markets due to Fed event. Markets remain volatile only when they have topped out or have bottomed out. Right now I feel we have bottomed out at 16850. Asian markets are slightly lower now. Dow futures are lower. SGX Nifty is at 17500. Finally , the most awaited day has come. Budget 2022 is going to be presented today. Expectations are of a good and stable budget. Reasons are the Elections coming up and LIC IPO in March. Govt very well knows if LIC IPO has to go through , Market sentiment has to be good. Without good market spending it would be very difficult for IPO to go through. Market had already fallen a lot before the budget. Although we have rallied in last 2 days but still we have some upside left. Though I feel it's not favourable to chase today's gap up. Today's gap up is a good opportunity to book profits those who carried longs. Bud
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