Tag: stock markets

Explainer | How can one start investing in stock market

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Investing in stock markets is buying and/or selling shares of a publicly traded companies i.e. listed on a stock exchange. The person/entity buying the share is called an investor.

Here’s an FAQ explaining the concept of stock market investing:

[faq][ques]Can I buy shares directly in the stock market?[/ques][ans]No, an investor cannot buy shares directly. An investor has to buy shares via a registered member of a stock exchange or stock broker. Stock brokers undertake transactions of buying and selling shares on behalf of the investor. [/ans][/faq]

[faq][ques]What functions can a stock broker execute?[/ques][ans]A stock broker will take you through the requirements and formalities such as completing Know Your Client or KYC details and opening necessary accounts. The stock broker can execute trades for you ie buying and / or selling shares for you. Brokers are familiar with the stock markets hence generally guide or recommend both short term and long term trades.[/ans][/faq]

[faq][ques]What is a trading and DEMAT account? [/ques][ans]In order to begin trading an investor will need to set up a trading account and demat account. When an investor wants to buy or sell shares it is done via the trading account. A Demat account is where the shares are held digitally. The account can be made via the stock broker. Investors can have multiple accounts with different brokers if needed.[/ans][/faq]

[faq][ques]Any word of caution for stock market investors[/ques][ans]Yes. Do be aware of unverified tips, messages via social media, calls and messages.[/ans][/faq]

[faq][ques]Is there any risk of investing in the stock markets? [/ques][ans]Be aware that investing in the stock markets does come with risk. There is no guarantee of profits when you buy a stock[/ans][/faq]

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RBI interest rate decision, global trends to drive markets this week: Analysts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Reserve Bank of India’s interest rate decision, domestic macroeconomic data and global trends will dictate terms in the equity markets this week, analysts said. Trading activity of Foreign Portfolio Investors (FPIs) will also influence markets, they added.

”The Indian market will be closely monitoring the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting scheduled for June 6to 8, 2023. Aside from that, market participants will be keeping an eye on the progress of monsoon,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd. Gour further said that the movement of the rupee against the dollar and crude oil prices will remain in focus.

”These factors will be closely monitored, as they have the potential to influence market sentiment. Additionally, macroeconomic indicators will play a significant role in shaping the market mood in the near-term,” Gour said. Domestic investors would track the Purchasing Managers’ Index (PMI) data for the services sector, scheduled to be announced, on Monday.

Shrikant Chouhan, Head of Equities Research (Retail), Kotak Securities Ltd, said, domestic market participants will keep an eye on the upcoming Reserve Bank of India (RBI) policy meet and monsoon progress. Last week, the BSE benchmark gained 45.42 points or 0.07 per cent, and the Nifty climbed 34.75 points or 0.18 per cent.

”This week is going to be an eventful one as we have the MPC’s monetary policy meeting outcome scheduled on June 8. Before that, on the macroeconomic front, S&P Global services PMI on June 5 will also be on participants’ radar for cues,” Ajit Mishra, SVP – Technical Research, Religare Broking Ltd, said. The 30-share BSE Sensex climbed 118.57 points or 0.19 per cent to settle at 62,547.11 on Friday. The Nifty advanced 46.35 points or 0.25 per cent to finish at 18,534.10.

”As we enter a new month, investors are anticipating the release of data points such as PMI and US payroll data, in addition to the outcome of the central banks’ monetary policy meeting,” said Vinod Nair, Head of Research at Geojit Financial Services. Contrary to the global trend, domestic indicators favour bullish sentiment, Nair said.

”The release of domestic GDP data, surpassing expectations, and robust Q4 earnings bolstered the growth prospects of the domestic market. Additionally, auto sales for the month of May displayed a sequential recovery, boosting sentiment across the sector,” he added.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Indian market logs second best returns among BRICS in FY23, but lags behind France

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India may have reclaimed its spot as the fifth largest stock market in the world, but when it comes to the returns generated during the last financial year, the country ranks second after South Africa among the BRICS group of emerging markets. Yet, India’s gain of 0.7 percent during the year outpaces the other three nations — Brazil, Russia and China.

European markets — France and Germany yielded the best returns in FY23 with gains of 9.9 percent and 8.4 percent, respectively, showed the Reserve Bank of India (RBI) annual report for FY23. While South African equities surged 2.9 percent in FY23, the UK and Japan saw their indices rising up to 1.5 percent.

Earlier this week, the Indian market recouped its fifth spot from France, after losing that status to the European nation in January. While China occupies the second spot with $10.2 trillion, Japan and Hong Kong are placed third and fourth with over $5 trillion market cap, Bloomberg data showed.

Also Read: European markets lower as US debt ceiling deal continues to remain in focus

Domestic equities gained in early March 2023 buoyed by positive domestic and global economic data releases. Subsequently, concerns over financial stability in the wake of rapid monetary policy tightening came to the forefront amid banking sector turmoil in the US and Europe, said the Reserve Bank of India (RBI), in its annual report for FY23. The central bank further added, “Markets recovered towards month-end, as contagion fears receded on assurances from several stakeholders and regulators regarding the health of the global banking sector.”

At a time when heightened global uncertainties marred the performance of equity markets across the world, the Indian equity market exhibited resilience during the financial year. Interestingly, the US market which accounts for about 43 percent of the world equity market featured among one of the laggards with a 9.3 percent fall, whereas Brazil lost the most with a 15.1 percent decline.

However, the return of foreign investors and improved earnings in the first quarter of FY23 restored investors’ confidence back in India. The foreign portfolio investors (FPIs) turned net buyers in the Indian equity market in July 2022 after a gap of nine months. Notwithstanding weak cues from global markets, Indian equities gained further in August 2022 supported by strong macro-economic data releases and softening of domestic inflation.

Also Read: Nifty heading towards all-time high in June: Experts recommend these stocks to buy

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Credit Suisse’ Asia equities managers leave as exodus worsens

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Credit Suisse Group AG is grappling with the departures of several senior executives in its Asia-Pacific equities business as worries about the bank’s financial health roil global markets.

Nick Silver, co-head of equities for Asia Pacific and head of equities for Japan is leaving along with Jonathan Jenkins, head of equity sales for the region. Chris Prasertsintanah, head of equities for South Asia, and country manager Thailand, has also decided to leave, according to a memo seen by Bloomberg News.

The three will look to pursue opportunities outside the bank, the memo said.

A spokesperson for Credit Suisse could not immediately be reached for comment.

Chief Executive Officer Ulrich Koerner is battling a crisis of confidence just days after the failure of US lender Silicon Valley Bank prompted a selloff in financial stocks globally. The Swiss lender earlier tapped the Swiss National Bank for as much as 50 billion francs ($54 billion) and offered to repurchase debt.

Also Read: Credit Suisse has sought no assistance, says Saudi National Bank

Silver joined the bank in 2018 and played a key role in turning around the regulatory relationship in Japan, and had recently focused on leading the wind down of the firm’s Delta 1 business in Asia-Pacific, according to the memo.

Jenkins, a 16-year veteran, will be relocating to Australia for personal reasons.

As part of the reshuffle, Adil Virani will assume sole responsibility as head of equities for Asia Pacific and Jasmine Pong is named head of equity sales for the region.

Also Read: Credit Suisse will not fall but a credit crunch is imminent, says a JP Morgan economist

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

SVB collapse: Why world equity markets are feeling the heat of the crisis

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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While US President Joe Biden has vowed action against those responsible for the Silicon Valley Bank “mess,” British Prime Minister Rishi Sunak recognises the “anxiety” over the collapse and India’s Union Minister of State for Electronics and IT, Rajeev Chandrasekhar is set to meet startup founders and CEOs to understand how the government can assist them to overcome the crisis.

Israeli Prime Minister Benjamin Netanyahu too said the government would assess the effect of SVB’s collapse on Israeli companies and determine whether or not to assist them.

While governments are looking to minimise the impact of the fallout on their industries, the stock markets around the world remained nervous on March 13.

What’s the Silicon Valley Bank collapse

California-based Silicon Valley Bank, the 16th largest bank in the US, was shut down on March 10 by the California Department of Financial Protection and Innovation which later appointed the FDIC as its receiver.

SVB was deeply entrenched in the tech startup ecosystem and the default bank for many high-flying startups; its abrupt fall marked one of the largest bank failures since the 2008 global financial crisis.

Also Read | SVB Collapse: Axis Bank says it is engaging with affected startups to open dollar accounts at GIFT City branch

The bank failed after clients — many of them venture capital firms and VC-backed companies that the bank had cultivated over time — began pulling out their deposits, creating a run on the bank (among the biggest US bank runs in more than a decade). Bank runs occur when customers or investors gripped by panic start withdrawing their money, causing the bank to be incapable of paying its obligations as they come due.

CNBC explained that the roots of SVB’s collapse stem from dislocations spurred by higher rates. As startup clients withdrew deposits to keep their companies afloat in a chilly environment for IPOs and private fundraising, SVB found itself short on capital. It had been forced to sell all of its available-for-sale bonds at a $1.8 billion loss, the bank said late Wednesday.

The impact on stocks markets

On March 10, banking stocks, were under pressure after news on Thursday that SVB Financial Group, which does business as Silicon Valley Bank, had sought to reassure tech clients as its stock collapsed by 60 percent while it was attempting to raise funds to plug a $1.8 billion hole caused by the sale of a loss-making bond portfolio.

Reuters reported markets were set for a bumpy ride this week as the fallout from collapsed startup-focused lender SVB coincides with key economic data and policy meetings.

Also Read: HSBC unit buys Silicon Valley Bank UK for £1 to protect deposits

However, analysts cited by CNBC say the collapse of Silicon Valley Bank is not likely to have a major contagion effect in Asia though one analyst says it could be seen as a “warning” — especially for economies that haven’t hiked interest rates aggressively.

Shares of SVB-exposed companies traded mixed across Asia on Monday, while bank shares slid to the lowest level in more than two months. “Most think that SVB is an idiosyncratic risk that is being bailed out by the US authorities,” said Hao Hong, chief economist at Grow Investment Group. “For now, the market is choosing to overlook these technical details.”

Several Asian technology firms across China, Japan, Hong Kong, and Australia have disclosed cash deposits at SVB with most emphasising the amounts were immaterial to their operations. Back home, game developer Nazara Technologies said two units indirectly related to the company held about $7.8 million in cash balances at SVB.

Also Read: Everything we know about how the Fed is handling the SVB crisis

At least a dozen Hong Kong firms, mainly involved in biotechnology, listed SVB as their banker in exchange filings, as per founder of Webb-site.com David Webb. That puts hundreds of millions dollars at risk for these small-cap firms, of which many are in their early stages of operation and unprofitable, Bloomberg reported.

Despite the optimism around Asian markets, Indian indices — Sensex and Nifty 50 — ended the March 13 trading session with losses. Financial services stocks remained under pressure as investors were watchful of the fallout of Silicon Valley Bank and its impact on domestic markets. The 30-share BSE Sensex dropped over 890 points to 58,237.85 and the broader NSE Nifty fell over 220 points percent to 17,186.50.

Safe-haven gold accelerates as traders assess SVB fallout

Gold raced towards the key $1,900 level on Monday as investors sought cover from the uncertainty triggered by the collapse of Silicon Valley Bank, emboldened by bets that the Federal Reserve may now have to tone down its rate hikes.

Also Read: Joe Biden vows action against Silicon Valley Bank ‘mess’, no losses to be borne by taxpayers

Spot gold was up 0.9 percent at $1,885.37 per ounce, as of 2:34 pm. Earlier in the session, prices hit their highest since early Feb at $1,893.96. US gold futures gained 1.2 percent to $1,889.50.

What next?

After the collapse of Silicon Valley Bank (SVB) and the jittery state of other banks like Signature Bank, economists are beginning to pencil in fewer hikes from the US Fed, but the Street is deeply divided.

While Goldman Sachs expects no hike in March, but one hike each in May, June and July taking the terminal rate to 5.25-5.5, Robert Sockin, Global Economist at Citi said he expects a 50 bps hike this month and a terminal rate of 5.5-5.75 percent. With risks to the upside, even 6 percent is possible, he said.

GS added that there is considerable uncertainty about the path while Sockin said he thinks SVB is idiosyncratic and that the US banking system is healthy and big banks have high capital.

Also, former Treasury Secretary Lawrence Summers had earlier warned that there will be “severe” consequences for the innovation sector of the US economy if regulators don’t smoothly work out the collapse of Silicon Valley Bank.

With agency inputs

Also Read: Y Combinator estimates 1 lakh jobs within its community at risk due to SV Bank collapse

Also Read: These companies have deposits in Silicon Valley Bank. Check list here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Market outlook | Union Budget, US Fed rate decision key events this week

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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For equity investors, the Union Budget for 2023-24 and the US Fed’s interest rate decision will be the major events to watch out for this week, analysts said. The ongoing earnings season, global market cues, domestic macroeconomic data announcements and auto sales numbers would also influence trading in the market, they added.

“The Union Budget is a key domestic event on February 1, and the outcome of the US Federal Open Market Committee (FOMC) meeting scheduled for the same day late at night is a key global event. A bunch of companies will come out with Q3 earnings this week, while monthly auto sales numbers and macroeconomic numbers from the USA will be other important factors.

“The market will continue to monitor the Adani Group. FIIs’ flow will be important,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Adani group stocks fell sharply last week after US-based investment research firm Hindenburg Research made damaging allegations against the conglomerate.

From the macroeconomic front, the Purchasing Managers’ Index (PMI) data for manufacturing and services sectors are due to be announced on Wednesday and Friday, respectively.

“With the Union Budget scheduled to be unveiled on February 1st, the week will be jam-packed with activity. The ongoing quarterly earnings will also have an impact on how each stock moves. The FOMC meeting will catch market players’ eyes on a global scale,” said Apurva Sheth, Head of Market Perspectives & Research, SAMCO Securities.

Market trends will also be guided by trading activity of foreign investors who have pulled out a net Rs 17,000 crore this month so far.

“This week is going to be critical not only for the financial markets but for the economy as well due to the scheduled Union Budget on February 1. Besides, participants will be eyeing the outcome of the US Fed meet on the same day.

“On the data front, auto numbers, manufacturing PMI and services PMI will also be in focus. As the earnings season gain pace, a lot of major names like Larsen & Toubro, ACC, Sun Pharma, HDFC, ITC and SBI will report their numbers during the week,” said Ajit Mishra, VP – Technical Research, Religare Broking Ltd.

Last week, the BSE barometer Sensex had tumbled 1,290.87 points or 2.12 percent.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Earnings, global trends to guide share markets this week: Analysts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Stock markets will be guided by the ongoing quarterly earnings season and global factors, analysts said, adding that foreign fund movement would also play a crucial role in dictating the terms.

Besides, movement of the rupee and trend in international oil benchmark Brent crude will also influence trading, they added.

“Market will look for direction from Q2 earnings and global cues. This week many financial and cement companies will come out with their Q2 results. Global markets are quite volatile, which may lead to volatility in our market as well,” said Santosh Meena, Head of Research, Swastika Investmart Ltd. In terms of global factors, macro numbers from the United States and China will be important, Meena said.

Movement of the US bond yields, dollar index and crude oil will be other global factors to watch out for, Meena added. It will be important to see institutional flows from here on. “Earnings and global cues will dictate the trend this week. First, participants will react to HDFC Bank’s number in early trade on Monday.

ALSO READ | India vulnerable to FPI outflows if there is global scare over emerging markets: Credit Suisse

“Going ahead, we have some prominent names like ACC, Ultratech Cement, IndusInd Bank, Axis Bank, Asian Paints, Bajaj Finance, ITC and Hindustan Unilever who will announce their numbers along with several others,” said Ajit Mishra, VP – Research, Religare Broking Ltd. HDFC Bank on Saturday reported a 22.30 per cent jump in its consolidated net profit for the September quarter at Rs 11,125.21 crore, helped by a reduction in money set aside for bad loans.

Apurva Sheth, Head of Market Perspectives, Samco Securities said, “Quarterly results of companies will occupy the centre stage. D-street will be interested to hear the management commentary about future earnings growth trajectory.”

ALSO READ | FPIs withdraw Rs 7,500 cr from Indian equities in Oct on rate hike concerns

According to Meena of Swastika Investmart, the Indian equity markets have been in a range for the last three weeks. Last week, the Sensex shed 271.32 points or 0.46 percent, while the Nifty fell 128.95 points or 0.74 percent.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Demat as a category is expanding, says IIFL Securities

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The total number of demat accounts in India have crossed the 100 million mark in August, according to monthly figures from depositories CDSL and NSDL.

To discuss where this growth is coming from and the customer acquisition costs, CNBC-TV18 spoke to Sandeep Bhardwaj, Ceo-Retail at IIFL Securities & Ajay Menon, CEO-Broking & Distribution at Motilal Oswal Financial Services.

Talking about trend, Menon said, “For us in the last 6 to 12 months, there has been a continuous growth across our network and we can see at least around 20-25 percent of growth in the last six months. The overall pace in the network is increasing consistently because of the robustness of the overall systems which have been placed by SEBI.”

He added, “I think the base is only going to increase the way things are going and we can see the overall expansion across our business network. We surely look at more of quality of clients coming in. So, we can see the investments increasing on a continuous basis.”

On addition on new accounts, Bhardwaj said that close to 60 lakh portfolio got added in last three months.

He said, “Demat as a category itself is expanding beyond direct equities. We are seeing constant growth as far as numbers are concerned, but that will lot more depend on equity market behaviour as well as cyclic nature of this industry.”

For the entire discussion, watch the accompanying video

Also Read: Exclusive | All new insurance policies should be available in demat form by Dec 2022: Insurance regulator

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks record a sink, rates and recession continue to worry investors

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian stocks fell the most in two weeks on Monday as concern about rapid US rate rises and slowing growth rattled investors, while the euro found support after Emmanuel Macron won a second term as French president.

MSCI’s broadest index of Asia-Pacific shares outside Japan slid 1.6 percent to a six-week low, and a nudge from authorities extended steep losses for the Chinese yuan. [CNY/]

Japan’s Nikkei fell 1.9 percent. Hong Kong’s Hang Seng fell 3 percent. S&P 500 futures dropped 0.8 percent while FTSE futures and European futures were off by more than 1 percent. Oil fell 2.7 percent. [O/R]

The euro was broadly steady at $1.0802, compared with broad dollar gains elsewhere, and it touched an almost two-month high against a struggling sterling.

Macron comfortably saw off a far-right challenge, reassuring markets about France’s commitment to an integrated Europe, even if his economic platform now depends on parliamentary elections in June.

“The absence of a change of course will reassure not only the other European Union countries but also the NATO,” said Vincent Mortier, chief investment officer of Amundi, Europe’s largest fund manager.

The news was small relief, though, for broader worry about a global backdrop of high inflation and likely rate rises that have been pounding bond markets for months – exacerbated by war in Ukraine and disruption from coronavirus-related lockdowns in China.

US shares had tumbled at the end of last week after Federal Reserve Chairman Jerome Powell said a 50-basis-point rate hike was on the table at May’s meeting and St. Louis Fed President James Bullard floated the idea of 75 bp hikes.

“Concerns around rates and recession are now the biggest risks for investors” with a particular focus on demand, said Candace Browning, head of global research at Bank of America.

“Spiking food and gasoline prices plus the end of key stimulus programs has investors concerned about the low-income consumer’s ability to spend.” The Treasury market steadied, keeping the benchmark 10-year yield at 2.8581 percent and the two-year yield off last week’s highs at 2.6399 percent.

Also Read: Stock Market LIVE Updates: Sensex, Nifty50 likely to make a gap-down start today, SGX Nifty futures drop 200 pts

YUAN SLIDES

Harsh restrictions in China have also begun to spread to Beijing, where more than a dozen buildings have been locked down, as concern grows about the economic damage of the shutdown of Shanghai.

China’s blue-chip CSI 300 index fell to its lowest since June 2020 and investors have so far been underwhelmed by policy support for the flagging economy.

The middle of China’s onshore currency trading band was fixed at its lowest level in eight months on Monday, seen as an official nod for the yuan’s recent slide and it was quickly sold to a one-year low of 6.5225 per dollar.

The dollar was also on the march elsewhere though trade was thinned a bit by public holidays in Australia and New Zealand. The Aussie slid 0.8 percent to a six-week low of $0.7185 and the kiwi fell 0.4 percent to a two-month low of $0.6603.

Sterling, buffeted by weak retail sales figures last week, slipped 0.3 percent to an 18-month low of $1.2792. [GBP/] Brent crude futures dropped 2.7 percent to a two-week low of $103.88 a barrel. U.S. crude futures fell 2.6 percent to $99.38 a barrel. Copper and iron ore fell in Asia, though soybean oil jumped after an Indonesian ban on palm oil export.

The week ahead is headlined by U.S. growth data due on Thursday, European inflation figures due on Friday and a monetary policy meeting for the Bank of Japan.

Investors expect U.S. growth to steady around 1.1 percent, far slower than the COVID-19 rebound-juiced figures of the recent past, but probably robust enough to bear rate rises.

The BOJ meeting will also be closely watched for any adjustments to economic projections or any signs of a policy response to the yen, which has tumbled more than 10 percent in two months.

Bitcoin held on just above resistance at $40,000.

Also Read: US stocks tumble amid surging dollar as Fed’s May meet rate hike take spotlight

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bottomline | In wildly swinging markets, be the animal you are

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Equity investors are truly tested when markets turn volatile. Making money in a one-way trending market is easy. It is in times of wild gyrations that the skills and discipline of investors are truly tested. We are in such a time.

Think of the market as a large jungle with myriad types of animals (read investors), each one with their own perspectives and motivations driving their actions. Because these are different, is why we have sellers and buyers for shares at the same time. Someone wants to sell to take money out for non-investing purposes, another to invest in alternative opportunities, some are simply booking profits or unwinding momentum positions. The reason to sell a stock can be numerous, same goes for buyers. The reason to buy or sell is also determined by the investment style or the kind of equity animal you are.

Here are few common kinds of equity animals.

The Agile Monkey

These are the investors who like to swing in and out of trades based on momentum. They aren’t tied to a trade or a stock, but are more in it for the thrill. While some of them manage to make a tidy sum, most fetch very little at the end of the day. They will, however, be seen jumping and cheering after a trade goes right, but will never reveal when swings go awry. They are most loved by Mr Broker, who extracts a toll for every swing, and merrily sips on his wine, while they swing from vine to vine.

Deer in the Herd

The deer is swift to act and moves in line with the trend, running with the herd, until there is a sign of danger. On spotting danger on the horizon, a deer is quick to turn around and head in a different direction. How they are different from monkeys is that they have staying power to go a long distance with the trend. They will stay with a trend till it runs and abandon the position once things start to turn the other way.

These momentum players usually reap rich rewards, if they catch a move right.

The Patient Fox

The fox is a patient hunter. It scouts its target, studies it well and then waits for the right time to pounce. The fox does keep an eye on the surroundings and the bigger picture, but the main focus is on the right target and right timing. These animals usually aren’t flustered by short-term gyrations and are usually patient investors. They are also most often happy with healthy returns, and don’t chase profits by taking on too much risk.

The Lazy Lion

These lions are lazy creatures. They don’t want to be bothered with tracking what’s happening in the equity jungle too closely. They have other things to do. They will usually just park their money passively in benchmark index funds, very often in systematic investment plans, and sleep. The returns they generate are more often than not, as good if not better than what many experts manage. No wonder, they are the lazy kings of the jungle.

Playbook for investors

Given the current market situation, the monkeys need to be more agile than ever. If they want to keep swinging, they must keep their stop losses tight and their swing sizes relatively smaller. For the deer, the big trend appears to be down and they should stay with it till it lasts. The fox will need to be more patient and much more disciplined–cutting out the noise and focusing on the specific propositions. The lions can continue to laze with their SIPs, as they will accumulate more shares when the market dives–given rupee cost averaging.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow