Nifty 50 and Gold are in declining trend as I have shown in the chart in this video.
Geopolitical tensions are increasing as conflict zones are expanding with China- Taiwan- USA getting into new conflict and China contiuing its covid lockdowns are also hurting the global economy and increasing inflationary pressure.
USA is going to come out with inflation data this week and we expect that this is going to be high and above comfort zone .This would compel US FED to increase interest rates by another 75 bps . This will make the cost of capital increasingly expensive and would further squeeze liquidity out of the system. Also increasing US interest rates would make investment in USA bond and money markets more profitable for investors and fund managers. This would lead to further pulling our money from the emerging markets and increasing investing in USA market by fund managers.
As such, corporates profits and GDP would also be squeezed further due to higher cost of capital. This would in turn lead to lower PE ratios for the emerging markets and ultimately bring down the stock market in medium term.So my advise is to sell on the rise and book profits as market has reached its near term top and investors would get opportunity in 3 months to enter at lower level.
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