Umm..hi. Not gonna ask how y’all are this morning. Guessing, we all are on the same boat seeing the current condition of the stock market. But, before we start, let’s think of something positive:
Cultivate the garden of your mind with the flowers of optimism; self-improvement will naturally follow
With that, let’s get started with today’s rant…
So, Bharat’s stock market is having a bit of a meltdown today. Both the Sensex and Nifty 50 plunged over 3% in intraday trading, mirroring the global gloom. The Sensex took a nosedive from 80,981.95 to 78,295.86, while the Nifty 50 spiraled from 24,717.70 to 23,893.70.
By lunchtime, the mood was decidedly downbeat: the Sensex was down 2.87%, and the Nifty 50 was down 2.81%. The market cap of BSE-listed firms shrank from ₹457 lakh crore to ₹440 lakh crore, leaving investors a tad lighter, to the tune of ₹17 lakh crore.
This is the current condition of the market 👇
But, what caused this turmoil?
Apart from negative economic data from the US and geopolitical concerns in West Asia, the unwinding of the Yen carry trade in Japan is another key trigger. With Japan hiking interest rates, the era of cheap Yen loans seems to be ending, adding to investor worries.
Other contributing factors include:
Rumors of a hedge fund blowup in Japan.
Appreciation of the Yen by 7% in the past few days, down 12% from its peak.
So, what’s the Yen carry trade?
The Yen carry trade involves borrowing in Yen at low-interest rates and investing in currencies with higher rates for profit.
This strategy has flourished with Japan’s historically low rates but is now under threat as the Bank of Japan raises rates to 0.25%. The Yen's recent 10% recovery, trading closer to 146 per dollar, impacts key Japanese exporters' profitability, triggering panic among global traders who relied on this arbitrage.
But, wait, there’s a silver lining to all this…
This is NOT Bharat’s problem. Though the Japan market clash has caused global outage, our market is supposed to recover from this soon; if not immediately.
So, we would suggest you not to panic sell. Otherwise, you’ll miss out on the golden opportunities that will come along with the market’s recovery. So, please be patient.
⚠️ Hold UP
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So, that’s it for today, folks! We will be back again tomorrow with more valuable insights about ‘Bharat in Business.’ Till then, stay informed and play safe!
