scenario-analyzer

Scenario Analyzer (India Markets)

Overview

This skill takes a news headline or event and builds probabilistic 18-month scenarios with cascading 1st, 2nd, and 3rd order sector impacts and specific stock recommendations for the Indian market.

Architecture

Skill (Orchestrator)
├── Phase 1: Preparation
│   ├── Headline parsing (keywords, entities, actions, numbers)
│   ├── Event classification
│   └── Load references
├── Phase 2: Analysis
│   ├── Collect related news (past 2 weeks via WebSearch)
│   ├── Build 3 scenarios (Base/Bull/Bear, probabilities sum to 100%)
│   ├── Map 1°/2°/3° sector impacts
│   └── Identify 3-5 positive + 3-5 negative impact stocks
└── Phase 3: Report Generation
    ├── Compile findings
    ├── Assess scenario probability distribution
    └── Save report

Event Classification

Classify the headline into one of these categories:

| Category | Indian Context Examples | |----------|----------------------| | Monetary Policy | RBI rate decision, CRR/SLR change, liquidity measures | | Fiscal Policy | Union Budget, GST changes, PLI schemes, disinvestment | | Geopolitical | India-China border, India-Pakistan, Russia-Ukraine, Middle East | | Commodity | Crude oil shock, gold prices, metal tariffs, food inflation | | Regulatory | SEBI rules, RBI NPA norms, telecom spectrum, pharma FDA | | Corporate | Major M&A, earnings surprise, promoter pledging, fraud | | Global Macro | Fed rate decision, US recession, China slowdown, tariffs | | Weather/Agriculture | Monsoon forecast, crop damage, food prices | | Elections/Political | State elections, central govt policy shifts |

Workflow

Phase 1: Preparation

1. Parse the Headline
2. Extract key entities (companies, sectors, countries, institutions)
3. Identify the action (increase, decrease, ban, approve, delay)
4. Note any numbers (rate changes, ₹ amounts, percentages)
5. Classify the event type

1. Load References ``` Read: references/headline_event_patterns.md Read: references/sector_sensitivity_matrix.md Read: references/scenario_playbooks.md ```

Phase 2: Analysis

1. Collect Context
2. Use WebSearch to find related news from the past 2 weeks
3. Identify any pre-existing trends or expectations
4. Note market's initial reaction if available

1. Build 3 Scenarios

For each scenario:

• Name: Descriptive title
• Probability: Must sum to 100% across all 3
• Timeline: 3 phases (0-6 months, 6-12 months, 12-18 months)
• Description: What unfolds in each phase
• Key Assumptions: What must hold true

Typical structure:

• Base Case (40-55%): Most likely outcome given current trajectory
• Bull Case (20-35%): Optimistic scenario with positive catalysts
• Bear Case (15-30%): Pessimistic scenario with adverse developments

1. Map Sector Impacts

For each scenario, assess impacts using the sector sensitivity matrix:

| Order | Definition | Example (RBI Rate Cut) | |-------|-----------|----------------------| | 1st | Direct, immediate | Banks: NIM compression, Housing: demand boost | | 2nd | Indirect, 3-6 months | Auto: loan demand, Real estate: prices | | 3rd | Tertiary, 6-18 months | Cement: construction demand, Durables: consumer spending |

Use NSE sectoral indices:

• Nifty Bank, Nifty IT, Nifty Pharma, Nifty Auto, Nifty FMCG
• Nifty Metal, Nifty Realty, Nifty Energy, Nifty Infra
• Nifty PSU Bank, Nifty Private Bank, Nifty Financial Services

1. Identify Stock Impacts

For each scenario:

• 3-5 stocks that benefit most (positive impact)
• 3-5 stocks that suffer most (negative impact)

For each stock, provide:

• Ticker (NSE symbol)
• Current price (use broker MCP get_ltp — Groww or Zerodha Kite — if available)
• Impact channel (why this stock is affected)
• Magnitude estimate (High/Medium/Low)

Phase 3: Report Generation

1. Generate Report

Save as reports/scenario_analysis_<topic>_YYYYMMDD.md with sections:

1. Related News (5-10 recent articles with sources)
2. Scenario Overview (3 scenarios with probabilities)
3. Timeline (0-6m, 6-12m, 12-18m phases for base case)
4. Sector Impact Matrix (1°/2°/3° impacts per sector)
5. Positive Impact Stocks (3-5 with rationale)
6. Negative Impact Stocks (3-5 with rationale)
7. Investment Implications (actionable takeaways)
8. Risk to Scenarios (what could shift probabilities)
9. Disclaimer

Quality Standards

• All probabilities must sum to 100%
• Every impact claim must have a causal chain (event → mechanism → impact)
• Stock picks must include the impact channel, not just "will benefit"
• Consider second-order effects (e.g., rate cut → weak INR → IT sector benefit)
• Flag any confirmation bias in scenario construction
• Include both sectors that benefit AND those that lose

Example Usage

User: "RBI cuts repo rate by 25 bps to 6%"

Analyst:
1. Classification: Monetary Policy
2. Key entities: RBI, repo rate, 25 bps, 6%
3. Collects recent RBI commentary and market expectations
4. Scenarios:
   - Base (50%): One more cut expected → banks pass on, housing demand rises
   - Bull (30%): Cycle of 75-100 bps cuts → strong credit growth, equity rally
   - Bear (20%): Global inflation returns → RBI pauses → rate-sensitive sell-off
5. 1° impacts: Banks, NBFCs, Housing Finance, Auto
6. 2° impacts: Real Estate, Consumer Durables
7. 3° impacts: Cement, Infrastructure
8. Stock picks: HDFCBANK, BAJFINANCE, GODREJPROP (positive); IT exporters if INR weakens

Resources

references/headline_event_patterns.md

Historical Indian market event patterns and reactions.

references/sector_sensitivity_matrix.md

Event type × NSE sector impact matrix.

references/scenario_playbooks.md

Scenario construction templates with Indian market context.