..... . VALI disclosures . .....: 12/05/26, PostMarket REPORT

Tuesday, May 12, 2026

12/05/26, PostMarket REPORT

The equity benchmark indices Sensex and Nifty declined sharply on Tuesday, extending losses for the fourth straight session, amid rising crude oil prices and concerns over the ongoing US-Iran tensions. Continued foreign fund outflows and weak global cues also weighed on investor sentiment.

At around 3 pm, the Sensex was down 1,467.26 points or 1.93 percent to 74,548.02, while the broader market declined to 23,383.05, down 432.80 points or 1.82 percent.

All the sectoral indices on the NSE traded in the red, except metals, oil & gas and PSU banks. The broader Nifty Smallcap100 and Nifty Midcap100 indices declined 1.26 percent and 0.81 percent, respectively.

Bank Nifty was down up to 1 percent, while Nifty IT tumbled 3.3 percent ahead of U.S. inflation data, with ,TCS Infosys, HCLTech and Wipro down between 2.5 percent and 4 percent.

ONGC and Oil India climbed 6 percent and 6.6 percent, respectively, after brokerage CLSA termed the government's royalty cuts on crude oil and gas production as a significant positive for the two companies.

Key factors behind market decline

1) Rise in crude oil prices: Brent crude, the global oil benchmark, rose 2.45 percent to USD 106.75 per barrel. Higher crude prices are seen as negative for India, which imports a large portion of its oil requirements, as they can increase inflationary pressures and impact growth and corporate earnings.

2) US-Iran tensions: Investor sentiment remained weak amid fresh concerns over the US-Iran conflict. US President Donald Trump on Monday said the ceasefire with Iran was at its "weakest" and on "massive life support", a day after he rejected Tehran's proposal to end the months-long war as "totally unacceptable". Market experts said fears of further disruption in global oil supplies due to the prolonged conflict continued to keep investors cautious.

3) Sharp selling pressure in IT shares: IT shares came under heavy selling pressure on Tuesday, dragging the Nifty IT index down 3.7 percent to its lowest level since May 2023. The sharp selling pressure emerged a day after OpenAI said it is launching a new company backed by more than USD 4 billion so help organizations build and deploy AI.

Heavy selling in information technology (IT) shares further dragged the markets lower. IT stocks hold significant weight in the Nifty 50 index, and sharp declines in the sector exert pressure on the broader market.

4) PM austerity measures: Bengaluru-based real estate and jewellery shares continued to see selling pressure for second straight day after PM Modi exhorted Indians to curb gold purchases for next one year and work from home to temper the fuel crisis amid West Asia conflict.

"We believe that the PM's speech should be considered as market signalling before the actual measures are announced in the coming weeks if the conflict continues. Such fiscal and monetary measures would cushion the currency (INR) from further depreciation," said JM Financial.

5) Rupee declines: The rupee depreciated 35 paise to hit a record low of 95.63 against the US dollar amid rising crude oil prices and concerns over the West Asia conflict. At the interbank foreign exchange market, the rupee opened at 95.57 against the dollar and later slipped further to 95.63, down 35 paise from its previous close.

6) Rise in India Vix: India VIX, the market's fear gauge, rose 2 percent to 18.87. A rise in volatility index reflects increasing uncertainty among investors and indicates heightened market volatility in the near term.

"The ongoing US-Iran conflict continues to weigh on global sentiment, keeping risk appetite subdued across financial markets and resulting in heightened headline-driven volatility across equities and commodities. Investors remain wary as uncertainty surrounding the duration and potential outcome of the conflict continues to cloud market confidence," Ponmudi R, CEO of Enrich Money, said.

7) Jitters ahead of inflation data: Investors are also awaiting India's April retail inflation data, scheduled to be released later in the day, for cues on the inflation outlook and the possible impact of rising crude oil prices on the economy.

8) Persistent FII selling: Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,437.56 crore on Monday. Sustained foreign fund selling impacts market sentiment and exerts pressure on benchmark indices due to heavy withdrawals from domestic equities.

9) Weekly expiry: Tuesday being the weekly expiry of Nifty derivatives contracts also contributed to volatility. On expiry days, traders square off or roll over positions in the futures and options segment, leading to sharp intraday swings.

10) Weak global trends: In Asian markets, South Korea's Kospi and China's Shanghai SSE Composite index were trading lower. Wall Street futures too indicated a weak opening for US markets.

Report by Paras Bist of Network18

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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, May 12, 2026

12/05/26, PostMarket REPORT

Key factors behind market decline

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