BREAKOUT MOVE in MARKETS.WILL IT SUSTAIN ? : Weekly Stock Market Analysis : June 30 2025

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BREAKOUT MOVE in MARKETS.WILL IT SUSTAIN ? : Weekly Stock Market Analysis : June 30 2025

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US Dollar, Yields Falling — Why Are Markets Booming? A Global & Indian Equity Outlook

 

US Dollar, Yields Falling — Why Are Markets Booming? A Global & Indian Equity Outlook

June 2025 has delivered a unique cocktail of market signals. The US Dollar Index (DXY) is at a two-year low, the US 10-Year Treasury yield is steadily declining, and yet, equity markets — particularly the S&P 500 and Nasdaq — are sitting at all-time highs. What does this divergence mean for global and Indian equities in the near term?

Let’s unpack these developments and explore their implications.

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📉 1. US Dollar Index at a 2-Year Low

A weakening dollar generally indicates:

• Expectations of interest rate cuts or a dovish Federal Reserve.

• Capital outflows from US assets into global and emerging markets.

• A more risk-on environment, as investors hunt for higher returns.

🟢 Positive for:

• Global equities (especially emerging markets like India)

• Commodities (oil, gold, metals)

• Export-heavy economies

• Global liquidity

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📉 2. US 10-Year Treasury Yields Falling

The benchmark yield dropping suggests:

• Lower inflation expectations

• Greater confidence in a soft landing or gentle economic slowdown

• Hints of monetary easing ahead, as the Fed might be done hiking rates

This is typically a bullish signal for equities, especially in high-growth sectors like tech, as future cash flows are discounted at lower rates.

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📈 3. US Equities at All-Time Highs

Despite macro uncertainty, US stocks — especially Nasdaq and AI-driven tech — continue to hit record levels. Why?

• Strong corporate earnings (especially from Big Tech)

• AI and innovation cycle fueling optimism

• Increased stock buybacks

• Fed pivot talk supporting valuations

However, caution is warranted. The market is pricing in perfection, and any miss in earnings or macro shocks could lead to sharp corrections.

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🌐 What This Means for Global Markets

Market Segment	Implication
US Equities	Cautiously bullish — valuations are rich, but liquidity remains supportive
Europe & Japan	Supportive backdrop, but growth remains tepid
Emerging Markets	Big beneficiaries due to weak dollar and falling US yields
China	May attract rotational inflows if stimulus improves

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🇮🇳 India’s Sweet Spot

India stands to gain significantly from this global setup:

✅ Positives:

• Rupee strength on FPI inflows

• Lower crude oil import costs

• Space for RBI to pause or cut rates

• Exporters benefit from global risk-on mood

• Renewed bullishness in financials, IT, autos

📉 Risks to Monitor:

• Overheating in small/midcaps

• Overvaluation vs EM peers

• Potential global corrections impacting FPI flows

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🔮 Near-Term Outlook (Next 1–3 Months)

Asset Class	Bias	Drivers
US Equities	⚠️ Cautiously bullish	Fed stance, AI boom, earnings
Global Equities	✅ Moderately bullish	USD weakness, yield curve
Indian Equities	✅ Bullish	FPI flows, inflation cooling, earnings
US Dollar	❌ Bearish	Lower yield appeal
Bonds	✅ Bullish (prices)	Lower yields, stable inflation
Gold	✅ Bullish	Weak USD, hedge demand
Crude Oil	↗️ Mildly bullish	EM demand + weak dollar

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💡 Strategic Takeaways

• Stay invested in equities, especially India and global tech.

• Watch for Fed commentary — the soft landing is now consensus.

• Diversify into commodities (gold, select metals) and fixed income.

• Be cautious of overbought sectors, particularly in the US and Indian midcap space.

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📌 Final Word:
This environment offers a golden window for Indian equities, buoyed by global liquidity, a weaker dollar, and moderating inflation. However, valuation discipline and risk management are key, especially if the US growth story stumbles or inflation surprises to the upside.

Nifty 50 Technical Forecast Using Trend-Based Fibonacci Time Zones (June - December 2025)

Introduction

As Indian markets hover near all-time highs, it's vital to anticipate major inflection points. In this blog, we use the powerful "Trend-Based Fibonacci Time" indicator, along with classic technical tools, to forecast likely movements in the Nifty 50 index for the next six months.

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1. What is Trend-Based Fibonacci Time?

Trend-Based Fibonacci Time is a forward-looking tool that uses three anchor points (Low → High → Retrace) to project potential turning points based on Fibonacci time ratios like 0.618, 1.0, 1.618, etc. These vertical time markers often align with trend shifts, reversals, or accelerations.

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2. Anchor Points Selected for Nifty 50

• Point 1 (Start of Trend): 20 March 2023 (Major swing low)
• Point 2 (Trend High): 15 September 2023 (Major swing high)
• Point 3 (Retracement Start): 26 October 2023 (Swing low before continuation)

Using these points, Fibonacci time zones are projected from Point 3.

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3. Fibonacci Time Zones and Key Dates

Fibonacci Ratio	Projected Date	Market Implication
0.618	Late July 2025	Reaction zone: breakout or pullback
1.0	Mid-September 2025	Major decision point: trend resolution
1.618	Mid-December 2025	Long-term confirmation or reversal

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4. Technical Confluence Analysis

a. Key Price Levels
- Support Zone: 24,800
- Resistance Zone: 25,300
- Bullish Target: 26,200

b. Fibonacci Retracements
Nifty recently reclaimed the 61.8% retracement zone, indicating bullish strength.

c. Moving Averages
A short-term "death cross" persists (50 EMA < 200 EMA), adding caution for aggressive longs.

d. Cycle Analysis
Past 55-day time cycles also confirm alignment near these Fibonacci time targets.

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5. Chart: Nifty 50 with Fibonacci Time Zones

Chart Description: The below chart shows simulated Nifty 50 prices with:
- Coloured dashed verticals for Fibonacci time zones

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6. Price Scenarios: June to December 2025

Month	Likely Scenario	Price Action Range
Late July	Reaction zone near 0.618 Fib Time	24,800 - 25,300
Mid-September	Strong breakout or correction at 1.0 time	24,300 - 26,200
Mid-December	Final trend verdict near 1.618 time	24,200 - 26,500

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7. Trade Setup Suggestions

• Long Entry: On daily close above 25,400 with confirmation, target 26,200+
• Short Bias: Below 24,500, targeting 24,200 or lower
• Risk Management: Use stop-loss just outside range extremes

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Conclusion

Time-based forecasting tools like Trend-Based Fibonacci Time provide traders with a predictive edge. By combining this with horizontal support/resistance, moving averages, and cycle studies, we’ve mapped out a structured outlook for Nifty 50 through year-end 2025.

Watch the time zones closely—price often respects the rhythm of time more than we expect.

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Author: Seek Edge Research
Published: June 2025

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MARKETS TRAPPED IN Middle East CRISIS ? : Weekly Stock Market Analysis : June 23 2025

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Forward Discounting in Stock Markets: How the Nifty 50 Prices the Future

Forward Discounting in Stock Markets:How the Market Prices the Future

One of the most powerful forces behind stock market movements is not just news, but expectations. This is the concept of forward discounting. In simple terms, it means markets move today based on what investors believe will happen tomorrow.

Prices reflect anticipated events—whether earnings, elections, policies, or geopolitical risks—before they occur. Once the event becomes official, markets often don’t react much, because it’s already “priced in.”

The Nifty 50, India’s benchmark index, offers real-world examples of this phenomenon. Let’s explore two major instances from 2024–2025.

What is Forward Discounting?

• Markets are forward-looking, not reactive.
• Prices reflect future expectations, not just current facts.
• News may cause little or no market reaction if already anticipated.

This explains why:

“Good news” can trigger a fall (if it was expected), and “bad news” may not cause a crash (if already feared).

Example 1: 2024 Indian General Elections – Expectations vs Reality

Leading up to the 2024 Lok Sabha elections, the Nifty 50 moved up steadily in April and May on expectations of a clear NDA victory.

• Expected Outcome: A strong mandate, policy continuity, and investor-friendly governance.
• June 3rd: Exit polls indicated a sweeping NDA win. Nifty jumped over 3% intraday.
• June 4th: Actual results showed a much narrower win. Nifty plunged more than 5% intraday.

Lesson: The best-case scenario was already priced in. When reality fell short of expectations, markets corrected sharply—a classic case of forward discounting in action.

Example 2: Trump’s Tariff Threats & Elon Musk Fallout (April–May 2025)

In April 2025, Indian markets faced global headwinds that led to forward discounting behavior:

• Former U.S. President Donald Trump threatened new tariffs on Indian IT, pharma, and auto parts as part of his campaign rhetoric.
• Soon after, Trump had a very public fallout with Elon Musk, criticizing Tesla’s offshore plans, triggering fears about Tesla’s India investment and the broader EV ecosystem.

Market Reaction

• The Nifty 50 dropped over 2.5% in late April 2025.
• IT, pharma, and auto stocks like Infosys, Sun Pharma, and Tata Motors led the decline.
• Markets feared lower exports, stalled EV investments, and weaker FY26 guidance.

What Was Forward Discounted?

• Negative policy impact before any actual tariffs were enacted.
• Delayed or derailed FDI flows from Tesla and other global investors.

Recovery in May

• Trump’s team softened their rhetoric amid lobbying pressure.
• Musk reaffirmed Tesla’s commitment to India despite tensions.
• The Nifty rebounded nearly 2% by mid-May, recovering earlier losses.

Lesson: Markets corrected based on perceived future risks—not current realities. And they recovered when expectations improved, even before policies were formally announced or reversed.

Key Takeaways

• Markets move based on expectations, not just facts.
• “Priced in” sentiment matters more than actual headlines.
• Misjudging market expectations often causes surprise moves.

Final Thought

Forward discounting helps explain why markets rise or fall before news becomes official. For Nifty 50 watchers, understanding this principle can be the difference between trading with the market—or being blindsided by it.

Markets don’t wait for certainty—they react to what they think will happen. Being early matters more than being right.

Nifty 50: A Volatile Ride (April–June 2025) — Technical and Fundamental Insights

Nifty 50: A Volatile Ride (April–June 2025) — Technical and Fundamental Insights

The Indian equity market, led by the Nifty 50, has experienced a roller-coaster journey over the last three months. From domestic policy moves to global geopolitical shocks, this period has seen heightened volatility, sectoral rotations, and institutional tug-of-war between FIIs and DIIs.

This post analyzes the market using technical chart patterns and fundamental drivers, including fresh cues from the RBI, U.S. policy threats, and macro data.

1. Nifty 50 Performance Snapshot (April to June 2025)

• Opening on April 1: ~22,350
• Closing on June 18: 24,812.05
• Gain: +11.1%
• High: ~25,170 (mid-June)
• Low: ~21,950 (early April)

2. Market Volatility (India VIX)

• Range: 13.1 to 19.2
• Peak: May 27
• Average: ~15.9

Volatility Triggers:

• Trump-era tariff threats on Indian exports (late April)
• India–Pakistan border escalation (mid-May)
• Israel–Iran conflict tensions (late May)

Volatility eased in June as diplomatic talks cooled each flashpoint.

3. Technical Analysis Overview

A. Daily Chart Highlights

• Support: 24,500 and 24,300
• Resistance: 25,000–25,170
• RSI: 52–68 (bullish momentum)
• MACD: Positive crossover (May), flattening in June
• Candle Patterns: Ascending triangle breakout (May), Bearish Engulfing (June 18)

B. Weekly Chart Patterns

• Bullish Engulfing: Week ending May 16 — validated breakout
• Doji: Week ending June 6 — signaled indecision
• Hammer: Week ending June 13 — rebound from 24,700
• Patterns: Rising Wedge (Apr–May), Head & Shoulders base (May–June)
• 20-week MA: Acting as strong support (~23,900)
• Volume: Surged during breakouts, dropped during consolidation

4. Sectoral Leadership

Sector	Highlights
Auto & FMCG	Driven by rural demand and strong Q4 earnings
Private Banks	Benefited from margin expansion and loan growth
IT	Stabilizing after April dip; cautious due to U.S. tariff risk
Pharma	Pressured by U.S. pricing constraints
Oil & Gas	Volatile in line with Brent price swings

5. Institutional Fund Flows

Month	FII Net (₹ Cr)	DII Net (₹ Cr)
April	+4,223	+28,228
May	+18,620	+67,642
June (till 13th)	-4,892	+44,000

Trend: FIIs turned cautious in June; DIIs provided strong support across the quarter.

6. Global & Domestic Macro Cues

RBI Rate Cut

On June 6, the RBI cut the repo rate by 50 bps to 5.75%, citing inflation comfort and global monetary easing.

Impact: Boosted bank stocks, realty, and consumer sentiment.

India's Economic Strength

• Q4 FY24 GDP: 6.8% YoY — stronger than expected
• Forex Reserves: ~$610 billion
• Fiscal Deficit: Tracking near 5.8% of GDP
• PMI: Services at 58.2 in May; Manufacturing holding above 55

Crude Oil

Range: $61.6 – $77.8 per barrel
Low in April, peaking mid-June on West Asia tensions.

U.S. Tariff Threats

Tariff warnings on Indian steel, agri, and IT sectors spooked the market in late April.

• Metals & IT faced selling on concerns over margin pressure
• Agri exporters saw short-term disruption
• Investors turned selective in export-oriented names

Watch: A confirmed tariff move may reignite volatility and sector rotation.

7. Market Outlook (Q3 2025)

Scenario	Outlook
Bullish	Upside to 25,500 if DIIs and macros stay supportive
Neutral	Rangebound between 24,500 – 25,200; consolidation expected
Bearish	Drop below 24,300 may invite broader profit booking

Watchlist Events:

• Monsoon progress and food inflation trends
• U.S. Fed commentary and tariff developments
• Crude oil movement and geopolitical risks

Conclusion

The Nifty 50’s 11% rally from April to June reflects strong economic momentum, DII support, and confidence in India’s structural growth. While geopolitical risks and U.S. tariffs warrant caution, domestic cues remain broadly favorable. Stay alert near key levels (24,650–25,000) and remain sector selective.

Disclaimer: This article is for informational purposes only. Please consult your financial advisor before making investment decisions.

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FROM BREAK OUT TO BREAK DOWN.MIDDLE EAST CRISIS.WHAT NEXT? : Weekly Stock Market Analysis : June 16 2025

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