Niftybank - Inflation, Inference and Internals.

Aug 18, 2022

We remained muted to the inflation numbers (call it numb?), FED continued tone on inflation than on growth. Markets focus on growth than inflation driven by lower than average volumes in many counters on the Index (Save a few) calls for caution at best and re-think at worst. The arc of the circle though cautions is not similar to the previous arc. The up move is happening at the higher half of the circle than the lower one suggesting it is more of corrective than a reversal at this stage. FED's minutes clearly suggest energy prices softer tone and commodity prices fall are not reliable factors. Do they know more than what we know about these prices? Contextually the stock piles of Energy in US is far below the last one decade levels and this clearly is the potent floor on them. As far as the commodities concerned they wont move the broad inflation needle as other components of inflation remains sticky. It is employment, availability of jobs, wage rise that is the area to be watched on sustainable numbers. For the bank nifty, 40000 is clearly the hurdle and broader range would be 38300-39800. So sell here and 39700 stops 40150 for move towards 38800 part and balance 38400.