Business

Bears Wrestles Control From The Bulls Yet Again

India CPI (YOY) (FEB) inflation came in at 6.44% VS 6.52% YoY. The street was expecting inflation at 6.40%. This is fodder for the bears as RBI will use this data for considering a rate hike in its next policy meeting.

Global

US futures came down sharply as more banks started slumping at the pre-market. PacWest Bancorp slumped 24% Premarket. First Republic also fell 60% in pre-market. First Foundation was also down 9% in pre-market. As expected, the contagion effect happened. Dow future was up over 300 points pared and is trading in red now and trading at a discount.

European markets while writing this report are down over 2%. Dax is trading down at 2.4% while CAC 40 is down 2.4%. FTSE is down 2%.

Germany’s 10-year bond yield is down 24 bps at 2.25% set for the biggest one-day fall since 2011. Similarly, US 10-year bond is also set for the largest two-session drop since 1987. UK’s two-year bond yield is also set for the biggest daily drop since 1992. There is more to it than meets the eye as more banks are slumping. Bears are having a field day.

The winner is Mr Bear

The bears had a field day today and may continue to do so if more banks slump and if Fed raises interest rates. Nifty may continue to see downward pressure amid continued negative global cues.

Hemant Ghai

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