Transcription
Very good morning, Bagga Sir. For the past four days, there has been peace in the Middle East for now. What do you think about the US and Iran? Yes, absolutely, Trump has also said that talks are ongoing. Negotiations are happening between Iranian and Omani negotiators on how to open the Strait of Hormuz. And Trump has said that the talks are going well. Overall, the best thing is that there has been no bombing from either side. There were some minor drone incidents in Jordan and Saudi Arabia. Saudi Arabia has a problem that Houthi attacked their oil refinery. A large oil refinery is currently shut down. So, we need to see if there is any permanent impact from that, but Saudi Arabia's contingency measures are usually quite strong. So, it seems the market has completely digested it for now. Overall, there has been a lot of tension between the US and Iran. Geopolitical risk has decreased. We have seen that reflected in oil prices, and due to that, there has been a slight change in sentiment in global markets. Regarding the downside, the AI trade, especially memory stocks, have fallen. Nvidia fell sharply yesterday, and Apple again became the world's most valuable company because Nvidia fell 5%, and today, in Korea, SK Hynix and Samsung are falling. The issue with memory stocks is also that the AI trade is a bit weak, and because of that, we are seeing that the Japanese market is also weak, but its impact on India is not that much because where we have money in AI and where there is selling, that is not an issue. How this AI trade will play out is very important this week with several results. There are results from four major American hyperscalers: Microsoft, Amazon, Meta, etc., and also from Korea's Samsung and SK Hynix, their biggest memory stocks. So, they will give a trend. The third important thing we need to watch is that the Fed meeting starts today. There is no expectation of a rate cut, but Citadel Securities, a very large hedge fund, has said that rates should be cut. But Trump targeted the Fed yesterday, saying that rates should have been much lower by now and American GDP should be growing at 8%, 10%, 12%, and the Fed is holding it back. So, the Fed is in Trump's crosshairs. The expectation is that there will be no rate cut. They will remain on hold and say that there is no permanent impact of oil prices on the economy yet. So, this will be a good conclusion, but there might be some selling today. Firstly, it is our monthly expiry, and secondly, before the Fed meeting, normally today and tomorrow, there might be some risk-off sentiment. Thank you very much, Ajay Bagga Sir, for speaking with us and giving your analysis on the latest developments.