Thread by @WithRitesh

The ghosts of 2008 are back. We had #Lehman. Today we have #ILFS and #RupeeAt75. The bulls have given up. #Sensex is down 4500 points in 25 sessions. As shared by @Prashanth_Krish over 50% of stocks traded on NSE are down 50% or more. Friday’s fall would have made it more brute.

Most of serious investors are fully invested. With the kind of sell-off witnessed in #Bajaj twins, #HDFC twins, #Reliance, #Kotak, quality midcaps/largecaps, no one is spared. Even Portfolios of respected investors like Rakesh J, @porinju, @VijayKedia1, SP Tulsian are down!!

In 2017 everyone made easy money. 2018 made you realise how difficult it is for traders and investors to make money in #stocks. I wish @adhia03 realises the gravity of his mistake by imposing #LTCG by referring stock markets as easy money making medium. #Nifty #Sensex

A survey conducted with 700 votes showed 65% having drawdown of 20%+. This would be 75% by now with 35% folks having drawdown of 40%+. Brutal. The levels of #Nifty & #Sensex do not reflect it. Charts by @nooreshtech & @entrepreneur987 shows RSI levels are at 2008 panic.

So as per above levels, it’s not a normal correction. Make no mistake. All sectors with bluest of blue chips have given up. This is where bottom forms and @BMTheEquityDesk shares same views. All rhetoric of #crudeoil, #rupee, #RBI, #tradewar will continue to generate fear.

But what matters is earnings: Season starts Oct 8. The best stocks will bounce back. Make use of this irrationality in prices. People will keep on talking of Nifty @ 6000. If that will come, probably there will be civil war. The risk is now not to remain invested. #Nifty #Sensex

The selling is more of external factors. FPIs have sold the highest-ever $9.1 billion worth of domestic debt and equity in the 9M 2018. At $7.1 billion, the selling in debt markets is by far the most, followed by $5.9 billion in 2013.

Then too, the rupee, bond and stocks had tumbled after the US Fed announced the end of QE. We know how the markets bounced after this externally induced factor got over. ILFS (internal factor) is now in government hands. So this influenced RBI decision on Friday.

The decision by the #RBI which has been taken otherwise by street was indeed best under current scenario where liquidity conditions have tightened and worries that defaults by #ILFS could lead to a contagion. The swift move by govt. to take over ILFS is another right step.

RBI said fundamentals of growth are well placed. RBI will further inject $5 billion into the system through bond purchases to ease the liquidity squeeze. The currency @ 74 is probably peaking out as USD rally approaches its end. RBI has shifted to hawkish stance, that will help.

For any analysis of #RBI policies, i would recommend to follow @vrk100 and @dugalira. They keep on posting very relevant stuff related to macros

At 10,000/10,200, the street is discounting #CAD at 2.8 per cent of GDP citing high crude oil prices up to $95 by Mar 2019. There is lot of speculation in #CrudeOil and any relaxation on #Iran will burn it down. The algos are just stretching the limits on “Iran” :)

Many of my friends & acquaintances have come in the markets in last 18 months and have been asking what to do now. I tell add if you have money or continue with an increased level of SIP for next few months. IGDP/Market cap ratio is now 72%.

At peak of 2008 crisis, GDP/Market Cap went till 62%. Such time don’t last long. Irrational behaviour on downside bring in the best entry prices. #Nifty #Sensex

So if your portfolio is bleeding with drawdown of 30-40%, now is not the time to give up if you are invested in right business. Currently there is no difference between good, bad and ugly. If ‘earnings’ is there in your stocks, they will bounce back very sharply.

What’s the concern on street: Rupee at 74 (reaching peak of 2018), Crude at 85 (Will peak by Oct end), ILFS (taken over to avoid contagion), Liquidity to NBFC (now well managed by RBI with yields falling), Oil & Gas fall (Read @arunjaitley today) Yes Bank (getting stability).

At worst, Nifty may fall up to 9800. Beyond that looks really difficult to me if crude stays around $90-93. All large caps have corrected significantly. BankNifty sell off is now getting weak, should bounce back. Financials & Consumption (HUL/ITC) have already been hammered.

Oil & Gas is already out of shape. IT & Pharma is in sweet spot. What matters from these price level: Earnings season. Watch out and read @SanaSecurities @sandipsabharwal @WeekendInvestng @indian_stockss @Nifty10276Mode @Wealth_Park @safiranand @kothariabhishek for more views!!

#CrudeOil at $85, #Rupee at 75, #CAD at 2.8, US yield at 3.25%, Emerging markets sell off, #ILFS, #NBFC liquidity crisis, #NPA of 10L cr + Power sector NPA, #Elecciones2018, PNB scam factored. Markets are forward looking and fast, current fall to 10200/300 justified. What’s next!

By the way, next theme that is emerging is sell off in U.S. markets along with #Italy banks/surging yields crisis. Circa 2012. Remember #PIIGS crisis and “Whatever it takes” from ECB’sSuperMario (Mario Draghi) who also famously said: “#Euro is irreversible”

So just yesterday I was talking about 2 new themes: Sell of in U.S. & #Italy debt outlook. Today we have 3rd biggest fall in #DowJones #Dow and we have the above 2 issues on front now.

Sharp sell off in #CrudeOil from $86 to $80. UST 10Y cooling off 10 bps from 3.25%. Supportive for #Rupee and #Nifty. #Sensex

As i had said before: #CrudeOil at $85, #Rupee at 75, #CAD at 2.8, US yield at 3.25%, Emerging markets sell off, #ILFS, #NBFC liquidity crisis, #NPA of 10L cr + Power sector NPA, #Elections2018, PNB scam factored. Markets are forward looking. What next!! Crude topped out.

It’s almost a month and see how volatility on downside is subsiding, #CrudeOil has topped, US$ topped wrt #Rupee, UST yields declining and #Nifty at 10,000 held. #NBFC’s pain subsided with swift #RBI and Govt. action. How many actually bought stocks instead of fancy quotes.

Those waiting for 9800, we are now at 10900. They are waiting to buy above 11,000 :) As mentioned above; #crudeoil & $ topped out; #rupee moved reversed, UST topped out for 2018 and markets bottomed out. #Nifty #Sensex

Reminder: Only 6 months back, more than 90% of street experts and fundhouses were talking of 9800 or 8800. Now all of them are taking about lifetime highs. Sentiment changes fast, very fast. Public memory is very short. #Nifty #Sensex

Read the thread: How conveniently the narrative of TV experts and fund houses targets changed over last 6 months. From talking about #Nifty targets of 9800/8800, they are now charting 12,000 :) And couple of weeks back, they said to wait for #Elections2019 outcome!! #Sensex