..... . VALI disclosures . .....: 12/06/26, Market Prediction

Friday, June 12, 2026

12/06/26, Market Prediction

Indian benchmark indices Sensex and Nifty are poised for a strong opening on Friday. The GIFT Nifty surged more than 250 points in early trade, tracking a sharp rally in global equities markets and a steep decline in crude oil prices amid renewed optimism over a potential peace deal in the Middle East.

GIFT Nifty was trading at 23,455 at around 8:05 am, up 255 points or 1.1 percent, indicating that the Nifty 50 could open well above Thursday's close of 23,161.60. The positive signal comes after Indian markets ended lower in a volatile session on Thursday, with the Sensex declining 151 points and the Nifty slipping below the 23,200 mark amid broad-based selling pressure.

Global risk sentiment improved significantly after U.S. President Donald Trump indicated that a peace agreement with Iran could be signed as soon as this weekend. Trump also said planned military strikes had been cancelled and that negotiations had advanced to the highest levels of Iran's leadership. This raised hopes of a diplomatic breakthrough that could end the three-month conflict and eventually reopen the Strait of Hormuz.

Asian markets rallied sharply on the development. MSCI's broadest index of Asia-Pacific shares outside Japan jumped 3.2 percent, led by a 7.4 percent surge in South Korea's KOSPI. Japan's Nikkei advanced 2.7 percent, while China's CSI300 and Hong Kong's Hang Seng gained around 1 percent and 1.3 percent, respectively.

Wall Street also witnessed its strongest rally in over two months overnight. The Dow Jones Industrial Average rose 930 points, or 1.86 percent, while the S&P 500 gained 1.75 percent and the Nasdaq Composite surged 2.54 percent. Semiconductor stocks led the advance, with the Philadelphia Semiconductor Index soaring nearly 8 percent. Investor sentiment was further supported by enthusiasm surrounding the record-breaking IPO of SpaceX, which raised $75 billion and valued the Elon Musk-led company at $1.77 trillion.

A sharp fall in crude oil prices added to the positive mood. Brent crude dropped to around $89.40 per barrel after falling nearly 3 percent overnight. WTI crude slipped to about $86.70 per barrel. Oil prices have now fallen to their lowest levels in two months as investors reduced geopolitical risk premiums following signs of progress in negotiations.

Lower crude prices are particularly positive for India, which imports the bulk of its energy requirements. Softer oil prices ease concerns around inflation, the current account deficit, corporate margins and the rupee, all of which are closely monitored by equity investors.

According to Ponmudi R, CEO of Enrich Money, Indian markets are set for a strong start as improving global sentiment and easing geopolitical risks boost investor confidence. He said the suspension of planned military action and progress toward a broader Middle East agreement have triggered a sharp improvement in global risk appetite. The resulting decline in crude oil prices is especially beneficial for India as it helps reduce inflationary pressures, lowers import costs and improves the outlook for corporate earnings.

Ponmudi added that investors will now watch whether the improving geopolitical backdrop can trigger a reversal in foreign portfolio flows, which have remained a major constraint on Indian equities in recent months.

Foreign institutional investors remained net sellers for a twelfth consecutive session on June 11, though the pace of outflows moderated to Rs 1,987 crore. Domestic institutional investors continued to provide support, purchasing equities worth Rs 4,224 crore and extending their buying streak to 18 straight sessions.

On the technical front, Ponmudi said the Nifty faces immediate resistance near 23,400. A sustained move above that level could pave the way for a rally toward 23,550. On the downside, the 23,100-23,000 zone remains an important support area.

For Bank Nifty, the key hurdle remains the 55,800-56,000 zone. A breakout above this range could strengthen bullish momentum and open the path toward 56,500-56,800 levels, while support is placed in the 55,000-54,800 region.

Report by Shaleen Sarawak of Network18

No comments:

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 . .....

Pages

logo

Friday, June 12, 2026

12/06/26, Market Prediction

No comments:

Today's

12/06/26, Market Prediction

.

Translate