..... . VALI disclosures . .....: 10/06/25, Share Market Strategy

Tuesday, June 10, 2025

10/06/25, Share Market Strategy

The GIFT Nifty was up 0.0y1% at 25,236.50 as of 08:00 a.m., signaling a muted start to Indian markets today.

Asian shares opened higher, buoyed by optimism surrounding the US-China trade talks as officials struck a positive tone following the first day of negotiations in London.

Despite no major breakthroughs being announced and stocks giving back some early gains, US officials conveyed an upbeat outlook on the discussions. Meanwhile, data released on Monday revealed that Chinese exports to the US in May experienced their sharpest decline in over five years, underscoring the tangible impact of tariffs on trade between the world's two largest economies.

India's benchmark equity indices closed higher for the fourth straight session on Monday on the back of positive global cues, including robust US jobs data.

The NSE Nifty 50 ended 100.15 points or 0.4% higher at 25,103.2, while the BSE Sensex closed 256.22 points or 0.31% up at 82,445.21.

Foreign portfolio investors stayed net buyers of Indian equities for the second straight session, mopping up stocks worth Rs 1,992.9 crore, according to the provisional data from the NSE. Domestic institutional investors stayed net buyers for the 15th straight session as they bought equities worth Rs 2,382.4 crore.

S&P 500 futures rose marginally.
Hang Seng index futures were up 1.33%.
Futures for the Nikkei 225 rose 0.02%.
Japan's Topix index rose 0.20%.
Australia's S&P/ASX 200 index rose 0.51%.
Euro Stoxx 50 futures were down 0.24%.

West Texas Intermediate crude rose 0.21% to trade at $65.43 per barrel.
Spot gold declined by 0.24% to $3,317.65 per ounce.

Copper rose 1.03%, reversing losses.
Nickel was down 0.43%.
Aluminium was up 1.16%, snapping downward trend.
Zinc was down 0.62%, extending losses.
Lead advanced 0.40%, extending gains.

The S&P 500 witnessed a modest gain, staying nearly 2% below its February peak. Tesla Inc. surged about 4.5% after President Donald Trump expressed a desire to end his dispute with Elon Musk, stating he would keep Starlink internet service at the White House and wished his billionaire supporter "very well." Meanwhile, Apple Inc. declined over 1%, as it showcased no significant artificial-intelligence developments during its developers conference.

US Commerce Secretary Howard Lutnick

described talks between Washington and Beijing as "fruitful," while Treasury Secretary Scott Bessent called the meeting "good." "We are doing well with China. China's not easy," Trump told reporters at the White House on Monday. "I'm only getting good reports."

Trade negotiations between the US and China are set to continue into a second day, according to a US official, as both sides seek to ease tensions surrounding technology shipments and rare earth elements.

Capri Global Capital: The company opened its QIP to raise 2,000 crore at an issue price set at Rs 146.5 per share, a 19% discount to the last closing. The total issue size contains a green shoe option of Rs 500 crore. The proceeds are to be used for the expansion of business operations by augmenting our capital base and repayment, in full or in part, of certain outstanding borrowings.
Tata Power: The company's solar manufacturing arm, TP Solar has crossed 4 GW solar module manufacturing at its Tamil Nadu plant. The plant has cumulatively produced 4049 MW of solar modules and 1441 MW of solar cells up to May 31, 2025. TP Solar is targeting 3.7 GW of solar cell output and 3.725 GW of module production in FY26.
Wipro: The company strengthened its Middle East presence with new regional headquarters in Riyadh.
Force Motors: Sanjay Kumar Bohra resigned as CFO and Rishi Luharuka was appointed as CFO.
HCLTech: The company launched a second delivery center in Thiruvananthapuram, Kerala. The centre will deliver projects across AI, GenAI, Cloud and emerging technologies to HCLTech's clients across industry verticals.
Mahindra and Mahindra Finance: The company approved an allotment of 15.4 crore shares on a rights basis at an issue price of Rs 194 per share. The issue price includes a premium of Rs 192 per share.
Jana Small Finance Bank: The lender filed an application with the RBI seeking approval for a voluntary transition from a small finance bank to universal bank.
Nykaa: The company completed the second tranche remaining investment of Rs 5 crore into Earth Rhythm Private.

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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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Tuesday, June 10, 2025

10/06/25, Share Market Strategy

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