Moses Harding John

It’s indeed VERY HAPPY DIWALI for India financial markets, largely thanks to trend down in Brent Crude value at $100-120 and clipping of Trump’s wings till end of 2028 if he manages to stay as POTUS: 1. USD/INR got pushed back into 94-94.35 from 95.15-95.50 (taking RBI off the “offer” on USD/INR) 2. 10Y yield easing from 7.50% to 7.15% 3. NIFTY bounce back from value-buy zone 22182-21743 (22179 to 24700 by ~11.3%) Will this lead to rate-pause in December from @RBI taking comfort from US 10Y yield drop to 4.8% from 5.3% that could get the FPIs back in the game before decision is taken on capital gains). Bottom line: Bit of relief on market sentiments since end of October; is this sustainable or lull before the next storm? It’s kind of cat on the wall situation; hope that the cat doesn’t jump on the wrong side! Fingers crossed!

It’s no surprise to see USD/INR hold at 95.15-95.50 and so is 10Y bond finding support at 7.35-7.50%! Does this indicate sign of trend reversal when Rupee relief is thanks to @RBI $ sales (from FCNR kitty) and 10Y bond recovery aligned to US 10Y yield easing from 5.30% to 4.90% post FED rate pause (for midterm elections)? Will FPIs see sub 2.5% spread (between India & US 10Y) attractive and find India equities good post >15% value adjustment when Rupee is not yet out of the woods? Blessing in disguise is Brent Crude push back momentum at $100-120! Waiting for better clarity post the US midterm elections: $65-85 or $120-135? It’s kind of “toss the coin” situation! Investors are not envious these days!

India’s resilience comes under severe pressure from #Brent at higher end of big-picture $65-120, holding firm at upper half $90-120 which pushed USD/INR from 94-94.35 to 95.15-95.50! Derive comfort from #Nift50 managing hold above the (recent) 2026 low 22179 and 10Y yield attracts interest at 7.50% post significant value correction from 6.15-6.65% to 7.35-7.50% in 2025-2026! Wish & pray that Brent doesn’t extend bounce back into $120-150 to make hell break loose! It’s nervous out there in the market place, hence avoid playing big either way and await clarity on the way forward! It’s good comfort that banks have delivered strong Q2/FY27 earnings and presume have kept buffers to cover Q3 impact from rising bond yields & cost of funds!