Nifty Bank - Before CB and After CB!

10 ต.ค. 2022

The last 15 years bull markets in particular and last 30-40 years bulls markets in general are more due to lower real interest rate regime as well as the nominal interest rate regime. Do the bulls ever care for these terms? So it is like markets before CB, that is now more or less near the end. The liquidity is drained fast and near 3 Trillion moved out. This is not about the losses, it is withdrawal of liquidity. When the tide goes, one will know who is naked is the story. Countries are staring at emperor without cloths. Many stroms brewing at the same time. Inflation is the single most important enemy to fight not just the central bankers, but also the policy makers and man on the street. At varying points of time the equity market priority gets to the last item in the list. Are we in that phase. With rupee to the south (expect 85 plus), Yields to the north, it would be a measure 20 bps point adjustment before the next bolt hits kind off. Already banks offering 7.50% deposit rates and the cost of margin funding moving above two digits incremental bull case is blunted save few spaces. The focus now shirts to the policy makers majorly to the yields than to active currency management and remain as monitoring. Clearly the regime shift focus moves to markets after CB that is Central Banks moving to bring higher nominal and positive real rates. The weaker economic agents would get wiped out, new ones will rise and the best case returns that is the usual cycle and it is natural process. Bulls fail to pass towards the 40000 and closed in the red. Now 38300-39300 on weekly close basis dirives the hopes while increased focus on bond market and currency market moves would dictate the price action. Financials under stress, while some banks are better than others. Supply 39300-39600-39930-40130, support 38800-38630-38430-38130. Shorts below 39600 for move to 38600.