Mars casts its spell, cloud may lift by weekend

Stocks slumped last week on political opposition to proposed retail FDI reforms and weak global cues from the ongoing euro zone situation. Despite some early week strength to 17000, the Sensex declined almost 4%, closing at 16213, while the Nifty finished at 4866. This bearish outcome did not come as a surprise as I thought we would get some downside due to the Mars aspect to Sun, Mercury, and Rahu and the approaching lunar eclipse. While I thought this might have manifested earlier in the week, the late week did look uncertain, given the volatility implicit in Saturday’s eclipse.

Friday’s EU agreement seems to mollify most global markets as member states agreed to tighter fiscal regulation as a way to reduce debt burden and thereby, lower the cost of borrowing. The ECB signalled that it would not intervene in the bond market, however, and this disappointed some investors who were seeking fresh liquidity. This reluctance to further loosen monetary policy was not too surprising, given the strengthened position of Saturn in December and January. The approaching Jupiter-Saturn aspect is one reason why the ECB and EU politicians may be less amenable to inflationary policies such as a QE type easing. Saturn’s preference for growth through restraint and responsibility does not mix well with debt monetising.

Those massive bond buyback programmes more commonly occur when expansionary Jupiter is dominant in the sky. While Jupiter does get a boost from Uranus here, Saturn is quickly moving into the picture now to dampen financial enthusiasm. This means that policies aimed at increasing liquidity at the risk of rising inflation will be more unlikely in the near term. Without liquidity forthcoming from central bankers, risky assets like stocks will have a tougher time. Saturn’s ongoing aspect to Jupiter, therefore, focuses our attention on high debt levels and the necessity of austerity. This is one of the reasons why stocks tend to weaken during Saturn transits.

This week also has some difficult aspects that may favour the bears. The main influence may well be the Mars-Rahu aspect in the first half of the week. We should see some improvement by the end of the week, as both the Sun and Venus change signs. Venus sign changes are more reliably bullish and its entry into Capricorn on Friday may well bring a return to optimism. Bullish Jupiter is also in its tightest alignment with Uranus this week which suggests that we should see some upside here.

Crude oil slipped a bit last week as signs of slowing growth dragged prices back under $100. This week looks more bearish for crude as the Mars-Rahu aspect could chase investors out of risky assets. The entry of Venus into Capricorn on Thursday and Friday is likely to encourage some buying, however.

With the cooling of Asian inflation data and the no new bond buying from the ECB, gold declined 2% in the week closing near $1,720. As expected, Rahu’s negative influence on the Sun weakened demand for bullion. Rahu is in aspect with Mars this week, which could produce more weakness for gold, especially in the first half of the week.  The Sun’s entry into Sagittarius on Friday could boost prices once again, however.
 
— The writer is a neo-Vedic astrologer specialising in predictive astrology. He runs the website www.modernvedicastrology.com