Markets fell by 2.80% yesterday due to several reasons, but primarily because they had risen too high too quickly. This correction was necessary to make the markets more attractive.
🔰 Numerically 5%-15% corrections are part of any Bull Run.
🔰 Key Reasons why did it happen:
1. Poor US Job Data: US markets are sensitive to this. 1.14 Lacs Job creation in July 24, VS, 1.71 in June 24.
2. US FED may have interest rates too high for way too Long. And has been giving, hopes and hopes, of rate cuts from the last several quarters. This is the Wake up call for Powell.
3. The Middle East is Simmering: Israel has struck hard on Iran and its affiliates, eliminating the HAMAS Chief and Hezbollah’s high ranking commander. Expect some more fireworks there, which will potentially spike oil prices and disrupt trade routes.
4. Last but the Major One –Â Yen carry Tarde Unwinding: This Means when an investor borrows money from a country with a low interest rate and invests in other countries where he can get a higher rate of return. Japanese Yen is generally stable but in the last 1 month it has shot up over 12% against USD, making it difficult for borrowers to square off the loans.
🔰All these factors will impact the global economy, hence there was a sell off.
🔰 But back Home on earning Front of Indian Companies: Of the Total 993 companies which declared results till last week, Average Revenue is up 8.90% & Average Net Profit is up 0.80%. Which is quite stable. – Souce HT MINT News. Eventually this is what matters. But in the short term we will dance on global tunes.
🔰 Indian stocks happen to be more resilient than most other countries. Today we have the firepower of huge domestic inflows, yesterday 5th AUG FII Sold 10K Crore VS DII Bought 9K. And very strong fundamentals.
