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Crypto Markets Fall on Release of Fed Minutes – Top Crypto Updates

Crypto markets dip on release of Fed minutes

Crypto markets fell after the U.S. Federal Reserve released minutes from its July 27 meeting in which the agency said it will continue to hike interest rates in order to manage inflation. The minutes stated that inflation was still too high, despite the labor market being strong and unemployment low—and there was no evidence it would subside just yet. Inflation in the U.S. is currently at a four-decade high. 

Crypto prices today: Bitcoin falls 3.8%, ETH down 5%

Bitcoin is currently trading at $23,395.64, a decline of 3.8% over the previous day. Ethereum fell 4.9% over the last 24 hours to $1,842.99. Solana fell 7.45% to $40.88, while Cardano is trading lower by 5.12% at $0.538. Avalanche (AVAX) has fallen by 6.82% to $25.85. The global crypto market cap stands at $1.12 trillion, a 4.08% decline over the previous day.

Coinbase has a serious insider trading problem: Report

Three finance researchers at the University of Technology in Sydney claim that insider trading is “systemic” in the crypto industry. They have estimated that such activity has taken place on up to 25% of Coinbase listings in the last four years, resulting in at least $1.5 million in ill-gotten profits. “Our findings identify cases that are yet to be prosecuted,” they wrote.

Coinfund launches $300M Web3 fund to bet on next ‘industrial revolution’

Crypto-focused investment firm Coinfund is launching a massive $300 million venture capital fund for Web3 founders looking to finance their crypto projects. The fund will prioritize a “founders first” philosophy when identifying Web3 projects that already have early traction in the market and aim to shape the next blockchain-based version of the internet.

Crypto scam revenue falls 65% amid market downturn: Report

As per Chainalysis 2022 Crypto Crime Report, revenue from crypto scams fell 65% year-on-year (YoY) to $1.6 billion so far this year as crypto prices declined. The total number of individual transfers to scams was at its lowest level in four years. The fall in asset prices made fraud schemes less alluring. Also, there are fewer inexperienced people in the market now than when prices were increasing.

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Daily Market Feed Pre Market Report

FED Minutes Lead to a Positive Close in the US Markets; Asia Volatile- Share Market Today

News Shots

Bharat Petroleum Corporation reported a 82 per cent decline in net profit in the quarter ended March 2022 as the firm held fuel prices despite rise in cost. Net profit of Rs 2,130.53 crore was reported in the January-March period as compared with Rs 11,940.13 crore.

Apollo Hospitals Enterprises said its consolidated profit after tax declined by 46 per cent to Rs 90 crore for the fourth quarter ended on March 31, 2022. The health care provider had reported a PAT of Rs 168 crore in the January-March quarter of 2020-21 fiscal.

Coal India posted a 45.9 per cent rise in its consolidated net profit at Rs 6,692.94 crore for the quarter ended March, 2022 on the back of higher revenue from operations. The company’s consolidated net profit was at Rs 4,586.78 crore in the year-ago period.

Fortis Healthcare  reported a 40 per cent jump in consolidated net profit at Rs 87.03 crore in the fourth quarter ended March 31, 2022. The company had posted a consolidated net profit of Rs 62.36 crore in the same quarter of the previous fiscal.

Bata India reported over two-fold increase in its consolidated net profit at Rs 62.96 crore for the fourth quarter ended March 31, 2022 helped by robust sales. The company had posted a net profit of Rs 29.47 crore in the January-March quarter a year ago.

Power Finance Corporation posted a nearly 10 per cent rise in the consolidated net profit at Rs 4,295.90 crore in the March quarter mainly on the back of higher revenues. The consolidated net profit of the company was at Rs 3,906.05 crore in the year-ago period.

Deepak Fertilisers reported a 144.30 per cent jump in consolidated profit after tax (PAT) at Rs 282.91 crore for the quarter ended March 2022. The company’s PAT stood at Rs 115.80 crore during the corresponding quarter of 2020-21.

What to Expect? 

NIFTY opened with a gap-up at 16,197 and fell. There was unusual bearishness in the intraday price action without successful reversal attempts. The index closed near intraday-low, at 16,025, down by 16,025, down by 99 points or 0.62%.

BANK NIFTY opened with a gap-up at 34,247 and moved higher but the resistance at 34,700 pushed the index lower. BNF closed at 34,340, up by 49 points or 0.14%.

IT fell by 3.38%.

The US markets moved up. The  European markets also closed in the green.

The Asian markets are down but NIKKEI is trading flat with volatility. The U.S. Futures and the European futures are flat.

SGX NIFTY is trading at 16,095 indicating a gap-up opening. 

NIFTY has supports at 16,080, 16,000, 15,950 and 15,870. We can expect resistances at 16,165, 16,200, 16,250 and 16,340.

BANK NIFTY has supports at 34,200, 34,000, 33,700, 33,400 and 33,200. Resistances are at 34,440, 34,800, 35,000 and 35,200.

NIFTY has the highest call OI build-up at 17,000 followed by 16,500. The highest put OI build-up is at 16,000 followed by 15,500.

BANK NIFTY has the highest call OI build-up at 35,000 and the largest put OI build-up is at 34,000.

INDIA VIX is at 25.3.

Foreign Institutional Investors net sold shares worth Rs 1,800 crores. Domestic Institutional Investors net bought shares worth Rs 2,200 crores. 

In the morning, it was a fight between the IT sector and BANK NIFTY where the latter finally settled to selling pressure and NIFTY fell. IT is exhibiting weakness following NASDAQ.

There was fear about US-China tensions as China reacted to the Biden statement on military aid to Taiwan if an invasion happens, by conducting a military drill near the Taiwan border. However, the White House later clarified that Biden has not come up with any change in the US stand on the subject and China mistook the ‘military aid’ for ‘military intervention.’

Fed minutes led to uncertainty in the markets but when released, added positive sentiments as it was in line with the expectations. We will have two 50 basis points hikes in June and July. The next Fed meeting is on 14th June. GDP growth data of USA will be out tonight.

There is a gap to fill below 16,000. Remember we had many down-trending expiry days recently. However, if the gap-up sustains, there is little to worry though FII selling in the second half can bring the positivity down.

I will be watching 16,165 on the upside and 16,000 on the downside.

Follow us on the marketfeed app’s Live Feed section to get real-time updates from the market. All the best for the day!

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Daily Market Feed Pre Market Report

Markets Await Fed Minutes; Asia Trading Higher – Share Market Today

News Shots

Grasim Industries:  reported a 55.56 per cent increase in its consolidated net profit at Rs 4,070.46 crore for the fourth quarter ended March 31, 2022. The company had posted a net profit of Rs 2,616.64 crore during the January-March quarter of 2020-21.

Dr Reddy’s Laboratories said it along with Senores Pharmaceuticals, Inc has launched Ketorolac Tromethamine tablets, used for managing severe pain, in the US market. The product is a therapeutic generic equivalent of the reference listed drug Toradol tablets.

Bayer CropScience reported a more than twofold jump in profit to Rs 152.7 crore for the quarter ended on March 31, 2022, compared to the same period of the previous financial year. The company’s profit stood at Rs 61.9 crore during the corresponding period of 2020-21.

Muthoot Finance said it will raise up to Rs 300 crore through a public issue of bonds. Announcing its 27th series of public issue of secured redeemable Non-Convertible Debentures (NCDs) of face value Rs 1,000 each, it said the issue comprises base issue size of Rs 75 crore with an option to retain oversubscription up to Rs 225 crore.

DVI Fund Mauritius offloaded shares of GMR Infrastructure for Rs 624.38 crore through an open market transaction by selling 17.03 crore shares of the company at an average price of Rs 36.35 apiece.

Metropolis Healthcare said its consolidated net profit has declined by 34 per cent to Rs 40 crore for the fourth quarter ended March. The company had reported a net profit of Rs 61 crore in the January-March period of previous fiscal.

Dollar Industries said it expects to become a Rs 2000 crore company by 2024-25 and will invest Rs 120 crore by the same year to double its spinning capacity.

What to Expect? 

NIFTY opened flat at 16,230 and faced rejection from 16,250. There was a fall till 16,120  from where the index bounced back only to face resistance at 16,250. NIFTY closed at 16,125, down by 90 points or 0.55%.

BANK NIFTY opened flat at 34,330 and consolidated in a range of 300 points. Though the index tried to move above 34,550, there was a quick sell-off. BNF closed at 34,290, up by 43 points or 0.12%.

IT fell by 1.88%.

The US markets were mixed with NASDAQ falling heavily and DOW JONES closing just in the green. The  European markets fell heavily.

The Asian markets are trading higher. The U.S. Futures and the European futures are trading in the green.

SGX NIFTY is trading at 16,160 indicating a flat to gap-up opening. 

NIFTY has supports at 16,080, 16,000, 15,950 and 15,870. We can expect resistances at 16,150, 16,190, 16,250 and 16,340.

BANK NIFTY has supports at 34,200, 34,000, 33,700, 33,400 and 33,200. Resistances are at 34,440, 34,800, 35,000 and 35,200.

NIFTY has the highest call OI build-up at 17,000 followed by 16,500. The highest put OI build-up is at 16,000 followed by 15,500.

BANK NIFTY has the highest call OI build-up at 35,000 and the largest put OI build-up is at 34,000.

INDIA VIX spiked to 25.6.

Foreign Institutional Investors net sold shares worth Rs 2,400 crores. Domestic Institutional Investors net bought shares worth Rs 2,000 crores. 

IT stocks have fallen again. Looking at NASDAQ, it is not surprising. There was negativity in the US market right from the premarket session as Snapchat had fallen by 30% due to weak forecasts. 

European Central Bank may go for a 50 basis points hike in July. New Zealand has raised the rate by 50 basis points today. Powell admitted for the first time that he may not be able to defend the recession coming in. The major event we have to watch is Fed Minutes for the 4th May meeting that will be out tonight.

It is frightening to see the premium in deep OTM put options. This shows that the market fears a fall. Remember how NIFTY fell on the last expiry day after a huge gap-down opening.

Piyush Goyal said that the wheat harvest will be down by 8% this year. You might have come across certain reports saying a food shortage is imminent. UN reports that there is a 30% rise in global food prices over the last year.

Look at the 1 PM candle where the market tried moving higher with a good green candle formation immediately followed by a deep red candle. Be prepared to handle volatility.

I will be watching 16,190 on the upside and 16,090 on the downside.

Follow us on the marketfeed app’s Live Feed section to get real-time updates from the market. All the best for the day!

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Editorial

The Fed Minutes: Explained

Minutes of the US Federal Reserve’s December policy meeting were released last week. It outlines the central bank’s plans to speed up measures to keep inflation in check. The US markets fell heavily following the developments as investors are concerned about the aggressive stance of the Fed. The Indian markets declined by up to ~1.5% on Thursday. In this article, find out what the Fed Minutes imply.

The Fed Minutes

The Federal Open Market Committee (FOMC) Meeting Minutes are a detailed record of the committee’s policy-setting meeting held nearly two weeks earlier. It offers detailed insights regarding the FOMC’s stance on monetary policy. The US Fed uses tools to control the overall supply of money in the economy and promote sustainable growth. One can examine the Fed minutes for clues regarding the outcome of future interest rate decisions. 

  • In a document released last Wednesday (Jan 5), the minutes from the policy meeting held on December 14-15 showed that Fed officials are concerned about the pace of increase in prices of goods and services (inflation) and global supply disruptions right from the beginning of the Covid-19 pandemic into the year 2022. These concerns seemed to outweigh the risks posed by the highly transmissible Omicron variant of Covid-19. 
  • The Fed Reserve had so far maintained a consistent stance on its monetary policy. It did not make any major changes in the repo rate or taper bond buying from the open market. The minutes offered details on the Federal Reserve’s abrupt policy shift in December, taken to counter inflation running at more than twice the central bank’s target of 2%. Any central bank would lower interest rates or sell bonds/taper bond buying in the open market whenever the actual inflation rate is higher than the targeted or projected inflation rate. Inflation is currently at a four-decade high in the US, and unemployment has declined to nearly pre-pandemic levels.
  • Federal Reserve officials said a strengthening economy and higher inflation could lead to earlier and faster interest-rate hikes than previously anticipated. This move essentially takes out money from the economy, restricting consumers from spending.
  • The FOMC announced it would wind down the Fed’s bond-buying program at a faster pace than first outlined at a previous meeting in early November to counter risks from inflation. This process is known as tapering. Thus, the Fed is on course to eliminate its emergency quantitative easing program (which essentially pumps money into the economy) a few months earlier than expected. 
  • The FOMC has voted for certain measures to curb inflation rates. Unlike the last meeting, the FOMC has taken steeper measures. It has announced a series of measures that hint towards interest rate hikes starting mid-March. This means that the Fed might take a decision that might hit the markets harder than usual.

What Next?

US Fed Chair Jerome Powell will appear before the Senate Banking Committee next week for a hearing on his nomination for a second four-year term. He is likely to update his views about the US economy at that time. As per industry experts, the achievement of the Fed’s goals in 2022 would ultimately depend on how the nation reacts to the surge in Covid-19 cases and how quickly life goes back to normal. Investment banking firm Goldman Sachs expects up to four Fed interest rate hikes this year.

We will have to wait and watch how the situation unfolds in the weeks to come.