..... . VALI disclosures . .....: 13/10/26, Asian Markets Fall

Tuesday, October 13, 2026

13/10/26, Asian Markets Fall

Asian stocks declined as the artificial intelligence trade, one of the hottest corners of the market this year, came under renewed pressure ahead of a key earnings season.

The MSCI Asia Pacific Index lost 0.9%, set for its weakest close since mid-August, as shares retreated in South Korea and Japan.

The Kospi Index — a barometer for the AI trade — slipped as much as 4.8%, set for its lowest close since July as chip bellwethers SK Hynix Inc. and Samsung Electronics Co. both tumbled more than 5%. The Nikkei 225 Index dropped 2% after traders in Tokyo returned after a long weekend.

As sentiment weakened, US equity-index futures lost ground in early Asian trading. Contracts for the tech-heavy Nasdaq 100 Index declined 0.5% after the underlying gauge retreated on Monday and a US gauge of chipmakers fell 2.7%.

Elsewhere, Brent crude oil dropped 0.8% to around $105.80 a barrel. A Bloomberg gauge of the dollar's strength broadly held its gains from the previous session, when it climbed to its highest since mid-May 2025.

Enthusiasm for artificial intelligence eased as investors weighed the outlook for capital spending against rising borrowing costs. With the S&P 500 Index nearly 120% above its 2022 low, the durability of the four-year bull market increasingly hinges on earnings keeping pace with elevated valuations.

“Sentiment appears as negative as we've seen for some time, buyers are stepping aside, and sellers are finding relatively little resistance in pushing prices lower,” wrote Chris Weston, head of research at Pepperstone. “The bears have the upper hand across much of the AI trade.”

Warnings are mounting around the AI trade, with Broadcom Inc. Chief Executive Officer Hock Tan the latest to flag concerns.

The AI boom has attracted investors whose strategies resemble those of gamblers, he said on Monday, suggesting some of them have little understanding of what they're betting on.

Last week, billionaire Ray Dalio warned that AI is a “classic bubble” that is nearing a bursting point thanks to rising interest rates and the need to turn wealth into cash.

Shares of SK Hynix and Samsung fell to their lowest level since August in early Asian trading after Sandisk Corp. slid 6% and Micron Technology Inc. declined 3.9% in the New York session.

Competition is also increasing. Chinese rival CXMT said it made progress on a memory-chip design capable of storing more data. Meta Platforms Inc. unveiled its Muse Wonder AI model.

“Some investors may be concerned about the potential impact of elevated yields on AI-related fundraising and a slowdown in capital expenditure,” said Hideyuki Ishiguro, chief strategist at Nomura Asset Management.

In Asia, focus will also be on the Indian rupee after the nation's most aggressive currency defense in more than a decade is telling market watchers that the central bank is prepared to pull out all the stops to keep the rupee from weakening beyond 97 per dollar.

Meanwhile, the earnings season in the US gets underway Tuesday, with Goldman Sachs Group Inc., JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. due to report. Bank of America Corp. and Morgan Stanley follow Wednesday.

S&P 500 companies are estimated to post a 25% increase in third-quarter profits from a year earlier, according to data compiled by Bloomberg Intelligence.

Investors will also be monitoring this week's US consumer price index reading.

Federal Reserve Cleveland President Beth Hammack said smaller, more frequent policy adjustments can help keep inflation expectations anchored, though she stopped short of backing another rate increase this month.

“This week's CPI report is likely to be the most important release of data the Fed will see before its October meeting,” Jason Pride, chief of investment strategy and research at Glenmede, wrote. “Barring a stronger than expected inflation reading, the Fed is likely to take a patient approach to its next rate hike.”

Report by Bloomberg

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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, October 13, 2026

13/10/26, Asian Markets Fall

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17/10/26, PostMarket REPORT and Next Week Strategy

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