What May Happen To Indian Markets Now

What may happen to Indian markets now as Indo-Pak tension has happened, RBI policy meeting is also tomorrow.

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Before I start you must be thinking why no emails were sent on 28, 29 and 30th of September 2016. We went for a short trip to Kamakhya Temple in Guwahati and Shillong visit for some long due leisure. Here is a photo of me and my wife there. It was a fun filled trip with family.

My Wife and Myself near Kamakhya Temple in Guwahati

Why Markets Are Rising Today?

Markets are rising today, the main reason is both India and Pakistan have decided to reduce tensions. Some kind of meeting did take place at high level to reduce tension so it’s obvious the dip buyers who wait for an opportunity to buy have jumped into the markets with cash and are buying stocks.

And obviously the short term traders who may have short sell the stocks futures and bought puts may be closing the trade at a huge loss. Remember that when a short seller closes a trade he becomes a buyer. This is the only way to close a short sell trade, you need to buy it back.

So both the buyers and stop loss takers are throwing money in the markets thus the rise.

Hope now you understand why the markets rise.

Coming to other news.

FIIs (Foreign Institutional Investors) are still positive about the Indian markets as it is still above the support level of 8550 even after the Indo-Pak tensions. This is real strong vibes coming out from the Indian markets.

I can bet that if this happened in any other country in one day the short-circuit would have been hit and the markets would have closed for trading the very next day. And this would have happened within seconds of opening. But this did not happen in India. This is a strong suggestion that markets are still looking strong and positive.

Which clearly indicates that the long term investors always make money. 🙂 Hay even I am one of them now. I am a medium term Options and Futures trader and a long term investor. Basically on both the sides where winners reside. These people are gifted money every day by Intraday traders. So I extend my thanks to Intraday traders. If they do not trade we will not see much liquidity in markets.

More than 60% of liquidity in the markets is because of Intraday traders. Unfortunately all of them lose money. When they leave the markets after losing money new Intraday traders join in and this continues for ever.

RBI Meeting Is On Tuesday October 4, 2016

Monetary policy review is on October 4, 2016, tomorrow by the new Monetary Policy Committee (MPC) headed by RBI Governor Urjit Patel.

New Monetary Policy Committee (MPC) headed by RBI Governor Urjit Patel may not change rates as they are still awaiting supporting data on inflation. Which clearly indicates Nifty will not move much tomorrow.

Macroeconomic data is more important for the markets move this week. Also what happens to Indo-Pak tensions. We all know that political meeting is very different than reality. Both countries have been meeting every few months or so to deescalate border tensions, but still tensions keep prevailing in the Indo-Pak border. But it is highly likely that the worst has happened and normal life may begun.

Lets hope for the best.

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