Friday, April 29, 2016

Yen Rise Markets Tumble - Will There be Recovery?

Boooooooooom! It felt like one has been blown to smithereens. That was what Bank of Japan did to markets around the globe. But even Central Bank of Japan did not know markets will be smashed by their innocuous looking decision.

Bank of Japan yesterday took a decision of keeping the deposit rate unchanged at -1%.. Nothing disastrous should have happened since these rates were continuing since Feb 2016 and markets were used to it. Then why did global markets sell off so ferociously?

You must catch the details in this column : Japan Unsettles Global Markets - Havoc Spreads

Frankly speaking I did not foresee such devastating reaction to Bank of Japan decision to keep rates unchanged.  On the contrary I had expected Nifty to do very well in trade yesterday. Fed had not been hawkish and I did not think Bank of Japan did anything wrong to upset market. Our own local conditions had no fresh negative news to rattle Indian markets.

So in my last post I was very certain that Nifty will get past 8000 with ease, and may even reach 8100. How horribly wrong I was!

Yesterday Nifty lost massive 132 points and closed at 7847, doing exactly the opposite of what I had predicted

Today also indications from global markets are not good :-
  • Dow closed down by 210 points.
  • Asian markets are in negative territory
  • Global oil is slightly down
  • SGX Nifty is down by 37 points.
  • Gold is up which does not bode well for equities
In my post Markets May Laze - Look Out For 8000 in Nifty , I had given buy call for two banking scrips of May Futures and same were bought as given below:-
  1. SBI May Fut bought at 199. Target 206. Yesterday it closed at 192.2
  2. Bankbaroda May Fut bought at 160.5. Target 166. Yesterday it closed at 160.8
Bank of India Apr Futures was rolled over to May Futures. It was bought at 98 and revised target given was 99/100. Yesterday it closed at 96.3

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