..... . VALI disclosures . .....: 29/06/25, Indian markets continued their positive momentum for the second consecutive week, breaking out of a five-week consolidation. The NIFTY50 index achieved its highest weekly close in the past nine months, finishing at 25,637 with a strong 2% gain.

Sunday, June 29, 2025

29/06/25, Indian markets continued their positive momentum for the second consecutive week, breaking out of a five-week consolidation. The NIFTY50 index achieved its highest weekly close in the past nine months, finishing at 25,637 with a strong 2% gain.

Similarly, the BANK NIFTY index set a new record, closing at 57,443, up 2% over the week.

The sharp momentum was driven by significant buying activity from foreign investors, which boosted overall market sentiment. The announcement of a ceasefire between the United States, Israel, and Iran further contributed to positive investor sentiment, as did a sharp decline in crude oil prices. Additionally, a notable drop in the volatility index (VIX) provided further support, encouraging bullish trends across key sectors.

The broader markets outperformed the benchmark peers with NIFTY Midcap 150 index surged over 2%, while the NIFTY Smallcap 250 index rose over 4%. Sectorwise, Metals (+4.8%), Consumer Durables (+3.4%) and Oil & Gas (3.2%) were the top gainers, while Realty (-1.9%), Defence (-1.1%)and IT (-0.4%) lost the most.

Index breadth

The NIFTY50 index sustained its positive momentum, with the breadth of the index-measured by the percentage of stocks trading above their 50-day moving averages-showing notable improvement. The week began with 68% of NIFTY50 stocks above this key technical level and rebounded impressively to 80% by the end of the week.

As highlighted in the chart below, the index breadth has consistently remained above the critical 50% threshold since March 2025, underscoring the ongoing strength in the market. The first indication of weakness will likely emerge only if the measure falls below the 50% threshold.

FIIs positioning in the index

Foreign Institutional Investors (FIIs) covered all their short contracts on the day of monthly expiry and started the July series with the long-to-short ratio of 38:62. The net open interest of the index futures of FIIs now stand at -33,518 contracts, indicating that the broader positioning of the FIIs still remains bearish.

However, it is important to note that the broader trend of the index remains bullish. For short-term clues, traders can monitor the addition and unwinding of the open interest in the long-to-short ratio. To track this ratio, you can login https://pro.upstox.com/ ➡️F&O➡️FII-DII activity➡️FII Derivatives.

The short-covering of the FIIs in the index futures was in line with their cash market activity. They remained net buyers for the third week in a row and purchased shares worth ₹6,613 crore. Meanwhile, the Domestic Institutional Investors remained net buyers and purchased shares worth ₹9,121 crore.

NIFTY50

The NIFTY50 index broke out of its five-week consolidation range. It formed a bullish Marubozu candle on the weekly chart, reclaiming the crucial 25,250 resistance zone on a closing basis. This indicates a fresh entry of buyers from the crucial support zones.

Over the next week, the index may sustain bullish momentum and consolidate its gains at higher levels following a sharp rise. The index has immediate support around the 25,200 zone, and a pullback towards this level could prompt fresh buying activity. However, closing below this level would signal a change in the short-term trend.

Oil & Gas

The NIFTY Oil & Gas index surged over 3% last week, forming a strong bullish candle on the weekly chart as it decisively broke out of a five-week consolidation. Additionally, the index experienced a bullish crossover of its 21-week and 50-week exponential moving averages, signaling a potential shift in momentum and suggesting that the sector is entering a sustained uptrend with increasing buying interest. This rally is supported by easing geopolitical tensions following the Israel-Iran ceasefire, which led to a sharp decline in crude oil prices. Against this backdrop, shares of Hindustan Petroleum , Adani Total Gas , Mahanagar Gas and Bharat Petroleum advanced in the range of 6% to 12%.

️Key events in focus: Globally, the focus will be on the U.S.'s monthly jobs data. The June nonfarm payrolls report is particularly important because a weak job market could lead to speculation about an early interest rate cut. Currently, markets are expecting only a 20% chance of a cut in July, with most anticipating it in September. Other important data includes the ISM manufacturing report for June on Tuesday and the services activity report on Thursday. Both reports will show the effect of trade tariffs on the economy.

Domestically, the auto sales data for June will be in focus. In the month of May Maruti retained its top spot, while Hyundai replaced Tata Motors in third spot and Mahindra continues to retain the second spot.

Spotlight: Market sentiment has improved, but concerns persist about potential tariff increases, especially with U.S. tariffs set to resume on July 9. Updates on trade agreements remain a key focus. Recently, the U.S. President announced on social media that a deal has been signed with China and suggested a possible agreement with India, though details are still unclear. Markets will be closely watching for more clarity on these developments.

️Oil: Crude oil prices crashed over 12% after the announcement of ceasefire between Iran and Israel war. The oil market remains sensitive to geopolitical risks, but stable supply conditions and excess OPEC capacity have limited sustained price gains. Experts believe that oil could stabilize near $70 per barrel if the ceasefire holds and no major supply disruptions occur. For the week, the West Texas Intermediate tumbled 12% and closed at $66.

Mark your calendars: U.S. stock markets will be closed on Friday, July 4, 2025, for Independence day.

✏️Takeaway: Following last week's analysis, the index has now closed above the 25,250 resistance level. This confirms the bullish signal indicated by the harami candlestick pattern. The breakout suggests renewed upward momentum and could pave the way for further gains in the near term. For the upcoming sessions, traders should monitor the support zone of 25,250. A retracement towards this level could attract further buying interest and pave the way for the next upward movement.

IPO listing: Six mainboard IPOs will make their stock market debut this week, including HDB Financial Services, Kalpataru Ltd and others. Investors who got allotment in these IPOs are looking forward to listings.

Disclaimer:

Derivatives trading must be done only by traders who fully understand the risks associated with them and strictly apply risk mechanisms like stop-losses. The information is only for consumption by the client, and such material should not be redistributed. We do not recommend any particular stock, securities, or trading strategies. The securities quoted are exemplary and not recommendatory. The stock names mentioned in this article are purely to show how to do analysis. Make your own decision before investing.

source: Upstox

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Trade Cycles

The four important features of Trade Cycle are (i) Recovery, (ii) Boom, (iii) Recession, and (iv) Depression!

The trades cycle or business cycle are cyclical fluctuations of an economy. A full trade cycle has got four phases: (i) Recovery, (ii) Boom, (iii) Recession, and (iv) depression. The upward phase of a trade cycle or prosperity is divided into two stages—recovery and boom, and the downward phase of a trade cycle is also divided into two stages—recession and depression.

Phases of Trade Cycle:

The phases of trade cycle are explained with a diagram:

(1) Recovery:

In the early period of recovery, entrepreneurs increase the level of investment which in turn increases employment and income. Employment increases purchasing power and this leads to an increase in demand for consumer goods.

As a result, demand for goods will press upon their supply and it shall, thereby, lead to a rise in prices. The demand for consumer’s goods shall encourage the demand for producer’s goods.

The rise in prices shall depend upon the gestation period of investment. The longer the period of investment, the higher shall be the price rise. The rise of prices shall bring about a change in the distribution of income. Rent, wages, interest do not rise in the same proportion as prices.

Consequently, the margin of profit improves. The wholesale prices rise more than retail prices. The prices of raw materials rise more than the prices of semi-finished goods and the prices of semi-finished goods use more than the prices of finished goods.

(2) Boom:

The rate of investment increases still further. Owing to the spread of a wave of optimism in business, the level of production increases and the boom gathers momentum. More investment is possible only through credit creation. During a period of boom, the economy surpasses the level of full employment and enters a stage of over full employment.

(3) Recession:

The orders for raw materials are reduced on the onset of a recession. The rate of investment in producers’ goods industries and housing construction declines. Liquidity preference rises in society and owing to a contraction of money supply, the prices falls. A wave of pessimism spreads in business and those markets which were sometime before sellers markets become buyer’s markets now.

(4) Depression:

The main feature of a depression is a general fall in economic activity. Production, employment and income decline. The prices fall and the main factor responsible for it is, a fall in the purchasing power.

The distribution of national income changes. As the costs are rigid in nature, the margin of profit declines. Machines are not used to their full capacity in factories, because effective demand is much less. The prices of finished goods fall less than the prices of raw materials.

✳Reality Tips to Traders

1)Trading in the stock market is a marathon. 2)Protecting your capital is key. (Learn to protect first) 3)Making 0 on the day is better than losing 50k 4)Losses happen; they are part of this business. 5)It’s not you vs. the market. It’s you VS you. 6)You are your biggest enemy; learn to be mentally disciplined. 7)Don’t follow the majority; follow the correct path. 8)Traders without a stop loss end up not being traders for long. 9)There is always another trade. 10)The big money is made waiting for the right set-ups. 11)Waiting for the right trade is the most powerful strategy. 12)It is better to cut a loss than to wait to be proven right. 13)Position sizing can make or break you. 14)Worry about the downside before you even think about the upside. 15)Don’t listen to headlines

..BANKING TERMINOLOGY

There are various types of Banks: PSU Banks, Private Banks, Co-operative/Regional Banks, Small Finance Banks and Foreign Banks. When you deposit money in a bank, let's say the bank gives you an interest rate of 4%. But when the bank lends out this money, they lend it out at say, 12%. The difference of 8% in the above scenario is effectively the profit of the bank! The loans that do not pay interest for 90 days are known as Non-performing Assets. Banks have to provide for such bad loans. Structure of a Bank Asset for a Bank: The asset portion of a bank's capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans). Liabilities for a Bank: The bank's main liabilities are its capital (including cash reserves and, often, subordinated debt) and deposits. The latter may be from domestic or foreign sources (corporations and firms, private individuals, other banks, and even governments). Banks are required to maintain Liquidity with the Reserve Bank of India: SLR (Statutory Liquidity Ratio): It is the money a bank needs to preserve in the form of cash, gold or government Bonds before providing credit customers. This limitation is added by RBI on banks to make funds available to customers on-demand at your earliest convenience. Banks are required to maintain SLR at 18%. CRR (Cash Reserve Ratio): Banks are required to hold a certain proportion of their deposits in the form of cash. Banks don’t hold these as cash with themselves, but deposit such amounts with RBI / currency chests. CRR rate is at 4.5% currently. Repo Rate: The rate at which the RBI lends short-term money to the banks. The RBI through its Monetary Policy committee changes the repo rate to balance growth and Inflation. Reverse Repo rate: The rate at which banks park their short-term excess liquidity with the RBI. Now let us understand various terminologies for Banks Net Interest Income (NII): This is the spread the bank makes on its lending. It is calculated as Interest Income – Interest Expended Net Interest Margin (NIM): This is the spread the bank makes on its lending. It is the earning which is left after deducting the cost paid to depositors from its yields on Loans. This is denoted in % terms. The formula is Yield on Loans – Cost of funds Capital Adequacy Ratio (CAR): The capital adequacy ratio (CAR) is a measure of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. Essentially, it is the Capital that is available to lend. Tier I Capital – In simple words this capital is freely available with the bank to lend out. Tier II Capital- This is the capital tied up somewhere and is less freely available to lend. In case of an adverse event, the bank can use this capital to lend. Under Basel III norms, a bank’s tier 1+tier 2 capital must be a minimum of 8% of its risk-weighted holdings. The minimum capital adequacy ratio, also including the capital conservation buffer, is 10.5%. Current Account Saving Account (CASA)- There is no interest paid on the Current Account and a small interest rate is paid on a savings account. The combination of both is called CASA which shows the liabilities of the bank on which it pays relatively less interest. Deposits: Bank deposits are a savings product that customers can use to hold an amount of money at a bank for a specified length of time. In return, the financial institution will pay the customer the relevant amount of interest, based on how much they choose to deposit and for how long. Now let us come to NPA. Gross NPA (GNPA): It is the total loans on which no payment has been paid for 90 days or more. GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances. Slippages: Slippages denote the fresh amount of loans that have turned bad in a year. The slippage ratio of a bank is calculated as Fresh accretion of NPAs during the year /Total standard assets at the beginning of the year multiplied by 100. Provisioning Coverage Ratio (PCR): This is the ratio of provisioning to GNPA and indicates the extent of funds a bank has kept aside to cover loan losses. For Instance, a company has GNPAs of Rs 100 and they have set aside 50 Rs, then the PCR is 50%. Net NPA (NNPA): The total figure left after deducting provisions made for bad loans from GNPA. (GNPA – Provisions+upgrades/writeoffs = NNPA) Special Mention Account (SMA) SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days. SMA-1 is a category in which stress with respect to the principal and interest has remained overdue for a period of 30-60 days. SMA-2 is a category in which stress with respect to the principal and interest has remained overdue for a period of 60-90 days

..... . VALI disclosures . .....

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Sunday, June 29, 2025

29/06/25, Indian markets continued their positive momentum for the second consecutive week, breaking out of a five-week consolidation. The NIFTY50 index achieved its highest weekly close in the past nine months, finishing at 25,637 with a strong 2% gain.

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Today's

02/07/26, A proposed US Senate bill, backed by President Donald Trump, could impose 500% tariffs on countries, including India and China, that continue trading with Russia, Republican Senator Lindsey Graham said in an interview with ABC News.

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