Bearish News
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Budget 2026 Maintains Status Quo on Crypto Taxation Structure
**Market Brief: India Crypto & VDA Sector (Budget 2026)** **Core Policy Update** The Union Budget 2026 has strictly maintained the status quo on crypto taxation, bypassing industry demands for relief. The existing **30%** flat tax on gains and the controversial **1%** TDS on transactions remain in full force. The ban on setting off losses against gains also continues, effectively taxing gross profits without accounting for net trading realities. **New Compliance Penalties** While tax rates remained static, the government tightened enforcement mechanisms. A new amendment introduces specific financial penalties for reporting failures, effective **April 1, 2026**: * **₹200 per day** for failure to furnish transaction statements. * **₹50,000** flat penalty for providing inaccurate information or failing to rectify errors. These provisions target reporting entities (exchanges and VDAs) to ensure strict adherence to Section 509 of the Income Tax Act. **Market Impact & Liquidity** The decision to retain the **1%** TDS is expected to perpetuate the "liquidity drain" on domestic exchanges. Industry data indicates that nearly **72%** of Indian crypto trading volume has already shifted to offshore platforms to bypass this levy. By refusing to lower the TDS to the requested **0.01%**, the government has prioritized transaction tracking over restoring onshore market depth. **Sector Sentiment** Industry response is mixed but largely somber. While some leaders view the new penalty clauses as a step toward "formalizing" the sector and removing regulatory ambiguity, the lack of economic rationalization is a major setback. The inability to offset losses remains a critical friction point, leaving traders with high tax liabilities even in net-loss scenarios. **Key Figures at a Glance** * **30%**: Tax on VDA gains (unchanged) * **1%**: TDS on transfers (unchanged) * **₹200/day**: New penalty for reporting delays * **₹50,000**: New penalty for inaccurate data * **72%**: Estimated trading volume moved offshore due to current tax structure
PSU Bank Stocks Decline Up to 6% Post-Budget 2026; Bank of India, BoB Lead Fall
**Market Brief: PSU Banks Hit by Budget Sunday Sell-Off** State-run bank shares faced intense selling pressure during today’s rare Sunday trading session, triggered by key announcements in the Union Budget 2026-27. The sector emerged as the biggest underperformer as markets reacted to policy shifts and fiscal data. **Sector Performance** The **Nifty PSU Bank index** tumbled approximately **5.6%** intraday, erasing recent gains. All 12 constituents of the index traded in the red, marking a sharp reversal from the sector's strong pre-budget momentum. * **Bank of India** led the losses, sliding nearly **7%** to trade around ₹152. * **Indian Bank** dropped over **8%**. * **Bank of Baroda** and **Union Bank** declined by roughly **4–5%**. **Key Triggers** Investors reacted nervously to two major developments outlined by Finance Minister Nirmala Sitharaman: **1. High-Level Committee for Banking** The government announced the formation of a high-level committee to comprehensively review the banking sector. While aimed at aligning the sector with the **"Viksit Bharat"** (Developed India) initiative and ensuring future growth, the lack of immediate clarity on potential structural changes fueled uncertainty. **2. Record Borrowing Target** The Centre set a gross market borrowing target of **₹17.2 lakh crore** for FY27, exceeding street estimates of ₹16.3–16.5 lakh crore. * **Impact:** Higher borrowing typically pushes bond yields up. * **Consequence:** Public Sector Banks (PSBs), which hold significant government bond portfolios, face the risk of **Mark-to-Market (MTM) losses**, dampening profitability outlooks. **Broader Context** * **Restructuring:** The Budget also proposed restructuring state-run non-bank lenders, including **Power Finance Corp (PFC)** and **REC**, to strengthen financial institutions. * **Rare Session:** This volatility occurred during a special live trading session, as the Budget presentation fell on a Sunday for the first time since the NDA government shifted the date to February 1. **Summary:** The dual whammy of structural review uncertainty and yield-spike fears triggered an aggressive sell-off in state-owned lenders, making them the primary casualty of the Budget 2026 session.
Silver Declines 33% and Gold Falls 18% in Two Days as Investors Assess Buying Opportunities
**MARKET BRIEF: PRECIOUS METALS CORRECTION** **Historic Price Collapse** Gold and silver prices have witnessed a historic crash, snapping a record-breaking rally with unprecedented speed. **Silver** has been the hardest hit, plunging approximately **33%** in just two trading sessions. On Sunday alone, MCX Silver hit a **9%** lower circuit, dropping to **₹2,65,652** per kg and wiping out over **₹1.35 lakh** from its recent peak of **₹4 lakh**. **Gold** mirrored this severe weakness, sliding roughly **18%** from its all-time highs. Prices retreated to trade around **₹1,38,634** per 10g on the MCX, while global spot prices fell below **$4,900** per ounce. **Primary Catalysts** The sharp reversal was triggered by US President **Donald Trump’s nomination of Kevin Warsh** as the next Federal Reserve Chair. Markets interpreted this "establishment-friendly" pick as a signal of stability for the central bank's independence, causing the **US Dollar Index (DXY)** to surge above **97**. Compounding the sell-off, the **CME Group** raised margin requirements for gold and silver futures. This forced traders to unwind leveraged positions immediately, accelerating the downward momentum. **Expert Outlook** Market veterans advise against panic, characterizing the drop as a "sentiment shock" and profit-booking event rather than a fundamental story-breaker. With structural drivers like geopolitical tension and central bank buying still intact, analysts suggest viewing this deep correction as a buying window. The consensus recommendation is to adopt a **staggered buying strategy**, slowly accumulating positions as volatility settles.
Bitcoin Holds Near $84,000 Following Warsh Fed Chair Nomination
**Market Brief: Bitcoin Stabilises Amid Fed Chair Nomination** **Current Snapshot** Bitcoin is trading near **$84,000**, attempting to stabilise after dipping to a two-month low of **$81,000**. The sharp volatility follows President Donald Trump’s official nomination of **Kevin Warsh** as the next Federal Reserve Chair, replacing Jerome Powell when his term expires in May 2026. **Key Market Drivers** * **Fed Leadership Shift:** Markets are pricing in uncertainty regarding Warsh’s policy stance. While historically a "hawk" (favouring higher rates), his recent alignment with administration calls for lower rates has created a mixed outlook for risk assets. * **Institutional Outflows:** Spot Bitcoin ETFs have seen significant capitulation, recording nearly **$818 million** in daily outflows and pushing weekly outflows above **$1.5 billion**. * **Sentiment Plunge:** The Crypto Fear & Greed Index has dropped to **16–20 (Extreme Fear)**, signaling aggressive bearish sentiment not seen since late 2025. **Broader Crypto Performance** * **Ethereum (ETH):** Trading around **$2,680**, down alongside the broader altcoin market. * **Altcoins:** Major tokens including **Solana (SOL)** and **XRP** have faced 7–8% weekly declines, though some recovery is visible in intraday trading. * **Liquidations:** Over **$1.8 billion** in crypto positions were liquidated recently, flushing out excessive leverage. **Outlook** Despite the "sell-the-news" reaction to the Fed nomination and heavy ETF bleeding, technical indicators suggest the market is oversold. The flush of leverage and extreme bearish sentiment may set the stage for a near-term contrarian rebound if the **$84,000** support level holds firm.
Gold Falls 12% in Record Daily Drop; Key Levels for Budget Day 2026
MARKET BRIEF: Historic Gold Crash & Pre-Budget Volatility **Current Status (Jan 31, 2026)** Gold prices have suffered a historic collapse, registering their steepest single-day decline in decades. After touching record highs earlier this week (near **₹1.83 lakh** per 10g), the yellow metal witnessed a brutal correction, shedding approximately **12% intraday** in international markets. **Market Data & Key Moves** * **MCX Gold:** Plummeted to trade near **₹1.69 lakh** levels, erasing over **₹11,000–₹14,000** per 10g in a single session. * **Spot Gold (Global):** Broke below the psychological **$5,000/oz** mark, retreating sharply from the **$5,600** peak. * **Silver Carnage:** Silver futures crashed even harder, plunging **15–17%** to slip below **₹3.35 lakh** per kg. * **Currency Impact:** The correction was driven by a sharp rebound in the **US Dollar Index (DXY)**, which strengthened on news of a potential hawkish Federal Reserve Chair nomination (Kevin Warsh), dampening safe-haven demand. **Drivers of the Crash** * **Profit Booking:** The "parabolic" rally of January (up ~32%) triggered massive liquidation of leveraged positions. * **Fed Jitters:** Renewed expectations of a tighter US monetary policy boosted the dollar, making non-yielding bullion expensive. * **Budget 2026 Focus:** Traders are now eyeing the Union Budget (Feb 1) for potential changes in import duties or gold-related policies, adding to the nervousness. **Outlook** Volatility is expected to remain extreme. With prices testing critical support zones near **₹1.60 lakh**, the market’s focus shifts entirely to the Budget announcement and the US dollar's trajectory. **Next Step:** I can provide a technical summary of the key support levels for MCX Gold and Silver to watch during the Budget session if you need precise entry/exit zones.
Oil Holds Near Six-Month High on US-Iran Tensions
**Global Oil Market Brief – January 31, 2026** **Current Market Status** Oil prices have rallied to near four-month highs, driven by renewed geopolitical instability and supply constraints. **Brent Crude** is currently trading around **$69.80 – $70.70** per barrel, while **WTI Crude** has climbed to approximately **$65.20 – $65.75**. **Key Drivers** * **Geopolitical Tensions:** escalating friction between the U.S. and Iran has re-emerged as a primary market mover. Recent warnings from the U.S. administration regarding nuclear talks and naval readiness have reintroduced a risk premium, with traders fearing potential disruptions in the Strait of Hormuz. * **OPEC+ Policy:** The alliance is reportedly set to extend its oil production pause through **March 2026**. This decision to withhold additional supply is intended to counter seasonal demand weakness and support a price floor near **$70**. * **Supply Disruptions:** Severe winter storms in the U.S. have temporarily shut in approximately **600,000 barrels per day** of production. Simultaneously, outages in Kazakhstan (Tengiz field) are tightening immediate global availability. * **Strategic Buying:** China continues to act as a stabilizer, with record crude imports and aggressive stockpiling estimated at **2.67 million bpd** in December, taking advantage of lower prices to build strategic reserves. **Market Outlook** While the immediate trend is bullish due to war risk and weather outages, analysts remain cautious about the broader 2026 horizon. Projections from agencies like the EIA suggest prices could average lower later in the year—potentially dipping towards **$56**—as global production eventually outpaces demand. For now, the market remains volatile, effectively balancing immediate supply fears against long-term oversupply forecasts.
Silver Records Historic Decline on MCX; Three Factors Behind the Fall
**Market Brief: Silver's Historic Correction** **Crash Overview** Silver futures on the MCX witnessed a historic single-day collapse on January 30, 2026. Prices plunged approximately **27%**, erasing over **₹1 lakh** per kg in a single session. The white metal, which recently touched a lifetime high of nearly **₹4.2 lakh** per kg, crashed to settle around the **₹2.92 lakh** level. This marks one of the steepest single-session declines in decades. **Key Drivers** * **Fed Leadership Shift:** Sentiment turned bearish following reports of Kevin Warsh’s nomination as the next Federal Reserve Chair. His perceived "hawkish" stance (favoring tighter monetary policy) triggered a sharp rebound in the US Dollar, pressuring dollar-denominated commodities. * **Margin Calls:** Major exchanges, including the CME, raised margin requirements for precious metals. This forced leveraged traders to liquidate positions aggressively to cover costs, accelerating the sell-off. * **Profit Booking:** The crash followed a vertical rally where silver had gained nearly **58%** in January alone. Traders rushed to lock in gains after the metal reached extreme overbought levels. **Global Context** The sell-off was mirrored globally, with international spot silver tumbling from record highs of nearly **$120** per ounce to trade near **$85** per ounce. Gold also faced significant pressure, dropping in tandem, though silver's high volatility made its correction far more severe. **Outlook & Fundamentals** Despite the massive "leverage flush," structural fundamentals remain active. Analysts note that the long-term investment case is supported by deep supply deficits and critical industrial demand from the solar, AI, and green energy sectors. Market observers view this as a sentiment reset rather than a reversal of the secular bull trend, with Citi maintaining a **$150** target in the medium term.
Bombardier Shares Fall 9% on Trump Tariff and Decertification Threats
**MARKET ALERT: Aerospace Sector** **Date:** January 31, 2026 **Bombardier Slides on White House Tariff Threat** **The Event** Bombardier Inc. (BBD.B) shares plunged **9%** in Friday trading following a direct ultimatum from U.S. President Donald Trump. In a statement released Thursday night via Truth Social, the President threatened to "decertify" Bombardier’s large-cabin Global Express jets and impose a sweeping **50% import tariff** on all Canadian-made aircraft. **The Ultimatum** The proposed penalties are conditional. President Trump stated these measures will remain until Transport Canada grants full certification to rival U.S. jets manufactured by Gulfstream Aerospace (a General Dynamics subsidiary). The President specifically named the **Gulfstream G500, G600, G700, and G800** models, claiming Canadian regulators have "wrongfully, illegally, and steadfastly" blocked their entry into the domestic market. **Market Reaction (Friday, Jan 30)** * **Stock Impact:** Bombardier stock opened sharply lower, shedding approximately **9%** of its value in early trading on the Toronto Stock Exchange. * **Price Levels:** Class B shares fell significantly from the ~**CA$249** range, trading down to the **CA$232** level amid high volume. * **Volatility:** The sell-off reflects investor fear that a 50% levy would effectively price Bombardier out of the critical U.S. business jet market, its largest revenue driver. **The Dispute Context** * **Gulfstream Status:** The FAA certified the Gulfstream G700 in March 2024 and the G800 in April 2025. * **The Bottleneck:** Reports indicate the delay in Canada stems from technical disagreements—specifically regarding fuel system icing test exemptions granted by the FAA but not yet accepted by Transport Canada. * **Scope:** While the White House later clarified the threat applies to *new* aircraft rather than the existing fleet, the "decertification" language sparked immediate concerns for U.S. regional airlines operating Canadian-made CRJ series jets. **Sector Watch** Analysts warn this escalation could disrupt North American supply chains, noting that over **150** Bombardier Global Express jets are currently registered in the U.S. General Dynamics (Gulfstream’s parent company) remained relatively stable, outperforming the broader aerospace dip.
Silver Drops 17% in Worst Session in 15 Years; Gold Posts Sharpest Decline Since 2013
📉 MARKET BRIEF: Historic Crash in Precious Metals **Warsh Nomination Triggers Massive Reversal** Global commodity markets are reeling from a historic selloff as of **January 31, 2026**. President Trump’s nomination of **Kevin Warsh** as Federal Reserve Chair has upended sentiment, triggering a massive profit-taking wave that erased weeks of gains in a single session. **Gold: Worst Drop Since 2013** Gold prices collapsed approximately **9%**, marking the metal's steepest single-day decline in over a decade. * **Spot prices** plummeted to the **$4,895 – $5,080** range per ounce. * **MCX Futures** saw a vertical drop of nearly **₹11,000 per 10g**, settling around the **₹1.54 lakh – ₹1.60 lakh** levels. * The selloff comes immediately after the metal touched record peaks above **$5,100**. **Silver: Worst Crash Since 1980** The white metal faced a far more brutal correction, crashing approximately **30%** in what analysts are calling the worst trading day in nearly 46 years. * **Spot Silver** dived to near **$83.45** per ounce, down from recent highs exceeding $120. * **MCX Silver** witnessed a historic wipeout, plunging roughly **₹1.06 lakh per kg** to trade near **₹2.93 lakh**. **Key Drivers** * **Dollar Resurgence:** The nomination eased market fears regarding Fed independence, sending the **US Dollar Index (DXY)** surging 0.8% and pressuring dollar-denominated assets. * **Liquidation:** A "sell everything" sentiment took hold as leveraged positions were unwound, exacerbating the slide amid extreme margin pressure. **Outlook** Volatility remains extreme. While the long-term structural drivers for precious metals remain, the immediate technical damage suggests a period of cooling and consolidation as markets digest the new Fed leadership landscape. [What caused the 2026 silver crash?](https://www.youtube.com/watch?v=jH-WluAsnyQ) This video provides relevant context on market reactions to political events and sharp selloffs in gold and silver, similar to the current Kevin Warsh-driven crash. http://googleusercontent.com/youtube_content/0
Trump Nominates Kevin Warsh as Federal Reserve Chair to Replace Powell
**Market Brief: Warsh Nominated as Fed Chair Amid Market Jitters** **Breaking News** President Donald Trump has officially nominated **Kevin Warsh** to lead the Federal Reserve, confirming months of speculation. Warsh, a former Fed governor (2006–2011), is set to replace Jerome Powell when his term expires in **May 2026**. The announcement, made on January 30, signals a potential "regime change" at the central bank, with Warsh expected to align the Fed’s focus more closely with White House economic strategies. **Market Reaction: Immediate Sell-Off** Markets reacted negatively to the news, driven by uncertainty over the Fed's future independence and Warsh's historical hawkishness. * **S&P 500:** Fell approximately **0.8%** to trade near **6,945**. * **Dow Jones:** Dropped roughly **1.0%** (approx. **146 points**). * **Nasdaq:** Slid **1.0%**, led by tech weakness. * **Safe Havens:** Gold prices tumbled over **5%** as the dollar strengthened and yields rose. **Treasury Yields & Rate Outlook** Bond markets signaled caution, pricing in fewer rate cuts. * **10-Year Treasury Yield:** Climbed roughly **5 basis points**, holding above the **4.25%** mark. * **Fed Funds Rate:** Currently holds steady at **3.50%–3.75%** following the January 28 FOMC meeting. * **Inflation Concerns:** Recent data shows December producer prices (PPI) rose **0.5%**, fueling fears that inflation could re-accelerate, complicating the path for future cuts. **Policy Implications** While Warsh has recently advocated for lower rates—aligning with President Trump's demands—investors remain wary. His past reputation as a "hawk" (favoring tighter money to fight inflation) contrasts with his recent commentary. The market is now pricing in a potentially volatile confirmation process and a shift in the Fed's "operating framework" that could challenge the institution's traditional autonomy. **Key Watch** Senate confirmation hearings will be the next major hurdle. Traders are closely monitoring upcoming inflation data to see if the Fed can afford the aggressive rate cuts the administration desires before Warsh takes the helm in mid-2026.
Nithin Kamath Favors Lower STT Ahead of Budget 2026
**Market Brief: STT Hikes & Revenue Shortfall (January 2026)** **Executive Summary** Zerodha co-founder Nithin Kamath has flagged a significant disconnect between government tax projections and actual market reality. His recent comments highlight that the steep Securities Transaction Tax (STT) hikes implemented in October 2024 are now visibly hurting both trading volumes and the government's own revenue targets. **The Trigger: October 2024 Tax Hike** The central government raised STT on futures from **0.0125%** to **0.02%** and on options from **0.0625%** to **0.1%**—an approximate **60%** increase. While the immediate impact was masked by a strong bull market in late 2024, the subsequent market cooling has exposed the structural damage to participation. **Impact on Volumes & Industry** Trading activity has contracted sharply as transaction costs heavily eat into trader margins. * **Volume Collapse:** Monthly options contracts plummeted from **397 million** in October 2024 to approximately **68 million** by early 2025. * **Brokerage Revenues:** Major discount brokers, including Zerodha, reported revenue drops of nearly **40%** for the quarter ending June 2025, marking a first-time "degrowth" in over a decade. * **Retail Exit:** High costs combined with regulatory tightening have forced a significant portion of retail liquidity out of the derivatives segment. **Revenue Reality Check (FY26)** Contrary to the government's expectation that higher rates would yield higher returns, collections are trailing estimates—a classic example of the Laffer curve effect. * **Target:** The Budget estimated FY26 STT collections at **₹78,000 crore**. * **Actuals:** Collections up to January 11, 2026, stand at roughly **₹45,000 crore**. * **Projected Shortfall:** Estimates suggest total FY26 receipts may reach only **₹57,000 crore**, a deficit of nearly **25%** against the target. **Market Sentiment** Kamath argues that the aggressive taxation has been counterproductive. By significantly raising the cost of entry and survival for traders, the tax base (turnover) has shrunk faster than the rate hike could compensate. With the Union Budget 2026 approaching, industry proponents are signaling that high transaction costs in a sideways market are unsustainable for liquidity, though expectations for an immediate rate reversal remain low.
Rupee Hits Record Low of 91.98 Against USD, Posts Sharpest Monthly Decline in Over Three Years
**MARKET BRIEF: RUPEE AT HISTORIC LOW** **Currency Performance** The Indian rupee (INR) concluded January 2026 on a fragile note, hitting a historic low of **91.99** against the US dollar during Friday’s session. The local unit eventually settled at **91.98**, marking its worst monthly performance since **September 2022**. **Key Drivers** The depreciation was primarily fueled by relentless foreign capital outflows, with foreign investors selling approximately **$4 billion** in Indian equities throughout January. This selling pressure was compounded by strong month-end corporate demand for dollars and heightened global risk aversion, despite a recent dip in Brent crude oil prices to roughly **$69.62** per barrel. **Central Bank Action** The Reserve Bank of India (RBI) actively intervened in the foreign exchange market to prevent the currency from breaching the psychologically critical **92** mark. Dealers report that state-run banks were selling dollars likely on behalf of the central bank to curb volatility and cap the rupee's decline. **US Federal Reserve Update** In a significant global development, US President Donald Trump announced the nomination of **Kevin Warsh** as the next Chairman of the Federal Reserve on Friday, January 30. This follows the Federal Open Market Committee's (FOMC) decision earlier in the week to keep benchmark interest rates unchanged at **3.50–3.75%**. **Outlook: Union Budget** Market focus now shifts entirely to the Union Budget 2026-27, scheduled for presentation on **February 1**. Investors are awaiting fiscal signals that could influence capital flows and offer support to the domestic currency. ***
FY27 Union Budget: Key Watchpoints for India’s Bond Market
**Bond Market Brief: Pre-Budget FY27 Outlook** **Fiscal Consolidation & Deficit Targets** Markets are pricing in a credible fiscal glide path as the government targets a fiscal deficit of **4.2% of GDP** for FY27, down from the revised **4.4%** in FY26. This consolidation strategy aligns with the medium-term goal of reducing the debt-to-GDP ratio, reinforcing investor confidence in macro stability. **Borrowing Dynamics & Supply** Gross market borrowing for FY27 is estimated between **₹16.0 trillion and ₹17.5 trillion**, with net borrowing likely stabilizing around **₹11.6–11.8 trillion**. While headline gross numbers remain elevated due to redemption pressures, the stable net issuance suggests the supply shock may be manageable. State-level borrowings, however, add a layer of caution, keeping total public sector supply high. **Yield Trends & Market Sentiment** The benchmark 10-year G-Sec yield is currently trading near **6.70%**, reflecting recent pre-budget volatility and supply jitters. Despite short-term pressure, the consensus leans toward cautious optimism. Investors anticipate that a fiscally prudent budget—devoid of excessive populist spending—will cap yield spikes, keeping the 10-year range-bound post-announcement. **Key Monitoring Points** * **Capex Growth:** Expected moderation to **~10%** growth (vs. aggressive hikes in prior years) to balance fiscal math. * **Demand Anchors:** Continued support from long-term investors (insurance, pension funds) is critical to absorbing the heavy supply. * **Global Cues:** Currency volatility and global crude prices remain external risk factors influencing domestic yields.
Bullion ETFs Slide Following Vertical Run
**MARKET BRIEF: PRECIOUS METALS CRASH** **Date:** January 31, 2026 **EXECUTIVE SUMMARY** The blistering rally in precious metals has come to a violent halt. Following weeks of vertical gains, both gold and silver witnessed a massive selloff on Friday, January 30, triggered by profit-taking and major Federal Reserve news. **KEY DEVELOPMENTS** * **Historic Intraday Crash** Silver prices collapsed **~15-17%** in a single session—the worst daily decline since 2011. After hitting a record high near **$121 per ounce**, global spot prices plunged below the psychological **$100** mark. Gold followed suit, dropping **~5-7%** (its steepest fall since 2013) to trade near **$5,100-$5,300**, retreating from its peak of over **$5,600**. * **The "Warsh" Effect** The selloff accelerated after President Trump announced the nomination of **Kevin Warsh** as the next Federal Reserve Chair (replacing Jerome Powell in May). Markets reacted sharply to Warsh’s reputation as an "inflation hawk" and advocate for a smaller Fed balance sheet. This triggered a rapid rebound in the US Dollar, putting immediate pressure on dollar-denominated bullion. * **Extreme Profit Booking** The correction validates recent warnings that the market’s "near-vertical rise" was unsustainable. Before the crash, silver had surged nearly **60-70%** in January alone. Investors moved aggressively to book profits after one of the strongest monthly performances in decades. **DOMESTIC IMPACT (INDIA)** * **MCX Carnage:** Domestic futures mirrored global chaos. Silver crashed by approx. **₹68,000 per kg** in a single day, falling from a peak of **₹4.20 lakh** to below **₹3.35 lakh**. * **Gold Slide:** Gold prices corrected sharply, shedding roughly **₹11,000–₹20,000 per 10g** from record highs. **MARKET OUTLOOK** While the long-term bullish drivers (geopolitical tension, debt concerns) remain, the immediate "euphoria" phase has broken. Volatility is expected to remain extreme as the market digests the new Fed leadership path and unwinds over-leveraged long positions. **Next:** If you are holding positions, check your stop-losses immediately; would you like me to analyze the technical support levels for Silver following this drop?
Japan Super-Long Bond Yields Rise on Fed Chair Speculation
Market Brief: JGBs & US Fed Outlook **Date:** Saturday, January 31, 2026 **Executive Summary** Japanese government bond (JGB) yields diverged on Friday, with super-long maturities climbing sharply. The move was driven by the convergence of domestic fiscal anxieties and the now-confirmed reports that **President Donald Trump** has selected **Kevin Warsh** as the next Federal Reserve Chair. While the 10-year benchmark saw a reprieve, the longer end of the curve repriced the risk of a hawkish shift in US monetary policy. **Key Market Movements (Jan 30 Close)** * **20-Year JGB Yield:** Rose to **3.18%** (up ~1.2 bps), reflecting heightened sensitivity to global rate expectations. * **10-Year JGB Yield:** Dipped slightly to **2.25%** (-0.7 bps) as investors covered short positions after the yield recently breached the **2.33%** level earlier this year. * **30-Year JGB Yield:** Climbed to **3.64%**, nearing multi-decade highs. * **USD/JPY:** Trading around **154.57**, with the yen remaining under pressure despite recent stabilization efforts. **Drivers & Analysis** * **US Fed Nomination:** Speculation solidified into news on Friday that **Kevin Warsh** is Trump's pick to succeed Jerome Powell in **May 2026**. Markets perceive Warsh as a potential disruptor who may favor a stricter monetary regime, sparking a sell-off in long-duration global assets, including Japanese super-longs. * **Domestic Fiscal Fears:** The JGB market remains fragile due to Prime Minister **Sanae Takaichi’s** expansionary fiscal pledges. With Japan's inflation holding above **3.0%** and the Bank of Japan’s policy rate now at **0.75%**, investors are demanding higher premiums for holding long-term government debt. * **Curve Steeper:** The divergence—shorter yields holding steady while super-longs rise—indicates a steepening yield curve. Investors are sheltering in shorter maturities (2-year yields at **1.25%**) while dumping longer-dated bonds vulnerable to inflation and aggressive US policy shifts. **Outlook** Market volatility is expected to persist as the Senate confirmation process for Warsh begins and Japan approaches its snap election on **February 8**. Traders will be closely watching for any coordinated "rate checks" by the Ministry of Finance if the yen weakens further past the **155** handle.
US Futures and Asian Shares Retreat Following Wall Street Session
**Global Market Brief: Volatility Sweeps Asia & US** **Asian Markets Slide on Global Cues** Asian equities closed lower Friday, January 30, directly tracking a volatile session on Wall Street. Regional sentiment was battered by a sharp sell-off in technology stocks and renewed geopolitical anxieties. Chinese indices dropped between **0.85%** and **1.40%**, while Australia’s market shed **1.1%**. Japan’s Nikkei traded flat, struggling to find direction amidst the broader risk-off mood. **Tech Sector Hit by Microsoft Plunge** The downturn was triggered by a massive slump in Microsoft shares, which plummeted roughly **10-12%** despite beating earnings expectations. Investors reacted negatively to the company's record capital expenditure of **$37.5 billion**, fueling fears that AI infrastructure costs are outpacing near-term returns. This sentiment dragged down the broader tech sector, heavily influencing Asian supply chain partners. **Commodities Retreat** Safe-haven assets and energy markets faced significant pressure. * **Gold** suffered a sharp correction, falling nearly **4-5%** to trade around **$5,100–$5,300** per ounce as profit-taking set in and the US dollar strengthened. * **Oil** prices dipped approximately **2%**, weighed down by reduced risk appetite and mixed global demand signals. **Indonesia Market Rout & Leadership Exit** The Indonesian Stock Exchange (IDX) took center stage in regional turmoil. The exchange's CEO, Iman Rachman, resigned Friday following a devastating **$80 billion** loss in market value over two days. The rout was sparked by fears of an MSCI downgrade to "frontier" status, amplifying investor concerns regarding governance and market transparency. **Trade Tensions Fuel Uncertainty** Global jitters were further stoked by escalating trade friction. The US administration recently hiked tariffs on South Korean goods to **25%**, citing delayed trade deal ratifications. Simultaneously, reports of a "historic trade surplus" for China have renewed friction with Western partners, keeping investors on high alert for further protectionist measures.
Bitcoin Falls Below $82,000 to Two-Month Low Amid Fed Chair Speculation
**Market Brief: Crypto Liquidation Flush & Macro Reset** **Bitcoin & Broad Market** Bitcoin plunged to a **two-month low**, briefly touching **$81,000** today (Jan 30, 2026). The sharp sell-off was driven by a "mechanical breakdown" in market structure, exacerbated by escalating US-EU trade tariff threats and a risk-off shift in US equities. * **Sentiment:** The Crypto Fear & Greed Index plummeted to **16** (Extreme Fear). * **Liquidations:** Over **$1.68 billion** in leveraged positions were wiped out in 24 hours. * **Long Squeeze:** **93%** of liquidations were long positions, with Bitcoin alone accounting for nearly **$780 million** and Ethereum losing over **$400 million**. **Macro Triggers** The crash correlates with broader macro anxiety. Renewed geopolitical posturing and tariff risks from the US administration pushed global markets into defensive modes. Institutional exposure was cut rapidly, removing critical liquidity during the dip. **Outlier: Hyperliquid (HYPE)** Bucking the bearish trend, **Hyperliquid** demonstrated significant resilience. The platform saw a surge in activity driven by non-crypto perpetuals (Silver and Gold), causing the **HYPE** token to outperform the broader market correction. Analysts credit this decoupling to the platform's utility in commodities trading and reduced team token unlocks. **Outlook** Market structure has reset. Support at **$84,000** failed to hold, and traders are now eyeing the **$75,000–$78,000** zone for potential stabilization. A recovery depends heavily on the cooling of macro trade tensions and the holding of these lower support levels.
Indian Bonds Decline on Supply Concerns Ahead of Federal Budget
**Market Brief: Indian Sovereign Bond Update** **Current Status** Indian sovereign bonds ended the week under continued pressure, with the benchmark 10-year yield hardening to **6.72%** as of Friday, January 30. The market remains nervous ahead of the Union Budget on February 1, driven by fears of a record government borrowing program for the next fiscal year. **Supply Side Pressures** Sentiment has weakened due to a supply glut. State governments raised nearly **₹39,800 crore** in bond sales this week, reinforcing concerns that debt issuance is outpacing demand. Traders are bracing for the federal budget announcement, where gross borrowing for FY27 is projected to hit a record **₹16–17.5 trillion**. This heavy supply pipeline is the primary weight on bond prices right now. **RBI Intervention** To counter the spike in yields and alleviate tight liquidity, the Reserve Bank of India has actively stepped in. The central bank advanced its Open Market Operations (OMO), committing to bond repurchases and announcing a **$10 billion** forex swap to inject durable liquidity. Despite these support measures, the "supply fear" narrative continues to dominate trading desks. **Global Headwinds** External factors are adding to the bearish tone. U.S. Treasury yields have ticked up, with the 10-year note trading around **4.26%**, influenced by speculation regarding future Federal Reserve leadership. This rise in global rates is reducing the appetite for emerging market debt and keeping the Indian rupee under pressure near the **92** per dollar mark. **Week Ahead** Volatility is expected to remain high. Market focus is entirely locked on two critical events: the fiscal mathematics in Sunday's Budget and the RBI Monetary Policy Committee meeting scheduled for **February 4–6**. While a recent rate cut to **5.25%** provided some relief, investors are now waiting to see if the central bank will pause or continue easing in the face of these fiscal challenges. *** To help you visualize the current technical setup before the Budget, I can generate a chart showing the 10-year yield's resistance levels over the last month.
Jefferies' Chris Wood Reduces India Weightage in Portfolio
**Market Brief: Jefferies Cuts India Weight Amid North Asian AI Rally** **Strategy Update** Jefferies strategist Christopher Wood has further trimmed India’s exposure in his Asia Pacific ex-Japan portfolio. The move reflects a tactical pivot as global capital aggressively chases the "AI picks and shovels" trade, favoring semiconductor-heavy markets in North Asia over India’s consumption-driven economy. **Key Portfolio Changes** * **India:** Recommended weight cut by **2 percentage points** to **15%**. * **China:** Reduced by **1 percentage point**. * **South Korea:** Raised by **2 percentage points** to **15%**. * **Taiwan:** Increased by **1 percentage point** to **16%**. **The AI Squeeze** The relentless rally in tech stocks has skewed the MSCI Emerging Markets (EM) index. As semiconductor giants surge, the combined benchmark weight of Taiwan (**21.3%**) and Korea (**15.4%**) has expanded significantly. Consequently, India’s weight in the index has compressed to **13.1%** — its lowest level since March 2023. **Capital Flow Reversal** The shift is not just theoretical. Recent data signals a rotation of funds, with Foreign Portfolio Investors (FPIs) pulling approximately **$3.9 billion** from Indian equities by December 2025. These outflows are largely being redirected toward AI-centric markets in the U.S., Taiwan, and South Korea, leaving India underperforming its regional peers despite strong domestic GDP projections of **7–8%** for FY26. **Strategic Outlook** Wood characterizes the current environment as "AI fever" but maintains a structural overweight stance on India (relative to a benchmark of 13.2%). He notes that while the AI trade is currently dominant, a future unwind of this "overinvestment" could act as the catalyst for funds to rotate back into Indian markets. [Jefferies' Chris Wood decodes Rupee fall](https://www.youtube.com/watch?v=ec1MDiRO2E4) This video provides additional context on Christopher Wood's broader views on the Indian market and currency, helping to explain the macroeconomic factors influencing his recent portfolio adjustments. http://googleusercontent.com/youtube_content/0
Fed Chair Pick Announcement Expected Today; Warsh Leads Speculation
**Market Brief: Trump Taps Kevin Warsh for Fed Chair** **The Headline** President Donald Trump has moved to nominate **Kevin Warsh** as the next Chairman of the Federal Reserve, cementing a pivot in U.S. monetary leadership. The announcement, confirmed by multiple sources on **Friday, January 30, 2026**, ends months of speculation and signals a potential regime change at the central bank. **Market Reaction: Immediate Volatility** Markets wobbled instantly as traders digested the news, balancing Warsh’s pro-growth rhetoric against his history of hawkish discipline. * **Equities:** S&P 500 and Nasdaq futures slid approximately **0.4%** to **0.5%**, extending losses driven by a broader tech slump (led by Microsoft). * **Bond Yields:** The 10-year Treasury yield climbed roughly **5 basis points** to trade around **4.27%**. Investors are pricing in the risk that Warsh’s preference for a "smaller balance sheet" could tighten liquidity, even if official rates fall. * **Currency:** The U.S. Dollar Index (DXY) strengthened **0.3%** to nearly **96.5**, reversing recent weakness. * **Commodities & Crypto:** Gold plunged **3%**, and Bitcoin fell **2%**, reacting to the stronger dollar and the prospect of tighter real monetary conditions. **The Strategy: "Lower Rates, Smaller Balance Sheet"** Warsh, a former Fed Governor (2006–2011), is viewed as a hybrid pick. While he aligns with President Trump’s demand for **interest rate cuts**, he simultaneously advocates for aggressively shrinking the Fed’s bloated balance sheet. This dual stance—easing rates while tightening money supply—is creating a complex outlook for risk assets. The market views him as less of a "safe dove" than other contenders, fearing that his focus on financial discipline could cap the upside for speculative assets. **What to Watch** * **Senate Confirmation:** Warsh is expected to face scrutiny but ultimately pass; however, any delay could spike volatility. * **Powell’s Exit:** Current Chair Jerome Powell’s term ends in May, but attention now shifts to whether he will resign early or stay on the Board of Governors until 2028, potentially complicating Warsh’s influence. ... [Analysis of Kevin Warsh's potential impact on the Fed](https://www.youtube.com/watch?v=D4roSFzE3Ww) ... This video provides a recent breakdown (Jan 2026) of what Kevin Warsh's leadership would specifically mean for market volatility and Fed policy tools. http://googleusercontent.com/youtube_content/0