EquiChain Wealth

Global Market – ECB cuts interest rate & all eyes on U.S. Fed This week we will focus on central bank as ECB has cut rate for first time after 2019 and now all eyes are set on U.S. Fed and Bank of Japan as their scheduled meeting this week. Gold prices cooled-off from record high as China’s central bank – PBOC stops buying gold. ECB Cut interest rate by 25-bps ECB key interest now stands at 3.75% from 4% earlier, ECB interest rate was at 4% from September 2023. Markets have only fully priced one further reduction this year, but economists polled by Reuters last week forecast two more cuts taking place over the period. U.S. Fed meeting outcome on 12-Jun-24 U.S. Fed chair Jerome Powell ‘s commentary post FOMC meeting will be key as any guidance for next rate cut will be important. BOJ Meeting outcome on 14-Jun-24 BOJ is expected to move to reduce JGB purchases at the June meeting, then raise rates in July. Yen selling pressure is likely to recede if real interest rates for shorter maturities rise as the bond market factors this in. Gold Price dips to around $2300 – as China’s PBOC stops buying gold Bullion held by the People’s Bank of China (PBOC) was unchanged at 72.8 million troy ounces in May, according to data released on Friday. It’s the first time the country has opted not to add to its reserves since October 2022, and follows recent moves by the central bank to start scaling down the size of its monthly purchases. Equichain Wealth Advisors: Market View & Opinion Incoming economic data indicates mix signals and there is no clear bullish or bearish trend emerging from data released so far, so market is keenly waiting for this central bank’s meeting and their commentary. ECB interest rate cut was in-line with expectation and still all eyes are set on U.S. Fed and it remains in-charge of global interest rate. Unless there is clear signal from U.S. Fed of interest rate heading southward, no major risk-on sentiment is expected. Current market remain is status quo. Click on the attachment to read the full report posted above 👆👆 Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Banknifty @ 49844 Rallied after non-event kind of RBI MPC policy. Focus will remain on political development over the weekend. We remain bullish on market & any correction could provide opportunity to buy / add. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Political events over the weekend 1) Government swearing in 2) Key Portfolio allocation 3) First cabinet meeting - Key decision & Agenda We remain positive on market and will find suitable opportunity to deploy fund. Not reducing position from existing portfolio Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

RBI MPC policy outcome at 10:00 AM Market expectation - Un-change Policy statement - Un-change. Today's event will be kind of no-event and not much is expected from it. We may use today's correction to add long in private banks in 2nd half as news over the weekend will be important. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Let political event settle down.............government formation will be important event for next 1 - 3 days. Fresh position needs to be reviewed once stability comes on volatility front. More downside can't be ruled out in case of any negative news on NDA government formation. 🩼🩼

We maintain our election strategy and avoid any fresh position today in medium term / long term portfolio. Looking at yesterday's price movement - Real estate sector stocks move caught our attention and we see more upside in this stocks. Any position to play result day volatility needs to be hedged. We are expecting swing of more than 5% and will if NDA manages to cross 400+ seats - can expect more of 10% or more. Major short covering by FII could be provide big trigger. Stay invested & Enjoy the move - analysis can be done from tomorrow Vote counting to start at 8:00 AM and clear trend likely to emerge around 10AM to 10:30 AM. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Equichain Valuation Matrix – Real Estate sector This week we will focus on real estate stocks and with view on election result. Please note that this report is prepared after 3-Jun-24 market reaction to EXIT poll and final general election result is awaited. While going through this report, it is possible that election result may know and market would react with wild swings. Our view on real estate sector is with view on Budget and beyond and focusing on valuation matrix with a view on price action where corporate earnings could and positive news could follow in coming months. Rational on valuation – Real Estate Sector – Fresh addition • Government focus on infrastructure will increase economy and directly benefit Sector • PSU stocks has outperformed in last 1-year, big boost after state election result in December 2023. • New government budget will be in focus and any steps to boost consumption could be beneficiary. Equichain Valuation Matrix: Strategy with view on election result on 4-Jun-24 Market reaction to EXIT poll may be just half way and we expect positive reaction to election result on 4-Jun-24. We in this report are going by the trend and believe that NDA may cross 400+ seats and big positive reaction is expected. Our strategy would be to add some of stocks from the reality index with 12 months view keeping in view the geographical presence and earnings of past few quarters. We would be focusing on PRESTIAGE, GODREJPROP, DLF, OBEROIRLTY and SOBHA, we see outperformance may continue in next few quarters. Click on the attachment to read the full report posted above 👆👆 Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Nifty @ 23152 & Banknifty @ 50363 & VIX @ 19.82 Exit poll has eased nervousness and VIX is now below 20 and if result goes as per exit poll then VIX could come below 16. We would prefer to go by our capital allocation strategy. 1) Current allocation around 75% - 80% 2) Fresh buy decision only after Wednesday or Thursday. 3) Any major rally - Will look to book profit in PSU & Add private banks and Infra names like LT. We have already positioned our self in our portfolio / Concept. Any position with a view to election result could be taken with hedge on long side. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Last week – review Indices ended the week with minor cuts as F&O expiry weighs the market ahead of final voting & EXIT poll on 1-Jun-24. Market well positioned to react on either way. VIX @ 24.60, closed at highest level indicating premium ahead of event day on Tuesday. Technical Insight Nifty @ 22368 & 22117 will act as important support level and 22775 & 22980 to act as resistance level. Nifty made high of 23110 on 27-May-24 but fresh up move could be trigger once 22980 is crossed. Banknifty @ 47897 & 47181 to act as import support level and 49614 & 50773 will be important resistance / target level. Banknifty is strong as compared to Nifty on chart. Approach on Technical: This week movement will be based on general election outcome on 4-Jun-24 and market will react to EXIT poll numbers which will released on 1-Jun-24. Nifty @ 22117 & Banknifty @ 47181 are important support level and major weakness can be seen below this level. Movement on Monday & Tuesday will be based on event outcome and market is expected to show move of more than 5%. Fundamental Insight 1) India's GDP Growth Exceeds Expectations At 7.8% In Q4, 8.2% In Fiscal 2024 2) Eight Core Industries Grew By 6.2% In April 3) India's Forex Reserves Decline To $646.67 Billion Equichain Wealth Advisors: Market View & Strategy Market will be reacting to EXIT poll numbers on Monday and election result on Tuesday. Market corrected this week as F&O expiry weighs on sentiment and profit booking was seen as Indices made fresh life-time high on Nifty. Our strategy this week is to keep exposure around 75% to 80% and we continue to keep balance approach with optimistic view on market. Fresh view on market after market settles down on reaction to result. Any up move above 10% on indices could be used to book profit and reduce exposure and any fresh buying to will be preferred once there is enough clarity. Market will be back to normal trading next week and we believe to avoid fresh trade this week. Click on the attachment to read the full report posted above 👆👆 Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Global Market – Gold, Silver & U.S. Economic data in focus This week we will focus on Gold and silver in commodity segment which currently trading near its recent life-time high. As we start new month focus will again shift to jobs data in U.S. which is released in first week of every month. U.S. market continues to focus around interest rate and reacting to data on probability of rate cut by September 2024 or earlier or later during 2024. Gold @ $2348 Gold was trading around $2000 - $2050 level around 6-months back and current is around 15% higher. An increase in gold prices by 15% is huge. Any concern on economy, geo-political tension or global central banks shift from reserve currency to gold are some of the key positive triggers for gold prices. Silver @ $30.55 Silver prices has seen jump of around 50% in last 6 months which was trading around $21 - $22 is currently trading at above $30. In month of May 2024, Silver prices rose by around $5 on various factors and consistent buying by China is one of the key reasons. U.S. Economic data Market will focus on monthly economic data and first week of any month focus on Jobs data, Non-farm employment change, average hourly earnings change and unemployment rate. US Fed meeting in June month is scheduled on 12-Jun-24. U.S. CPI & Core CPI data is also scheduled to be released on 12-Jun-24. Equichain Wealth Advisors: Market View & Opinion Market reaction this week has been sideways and continues to focus on trend of interest rate. We expect gold and silver will continue to remain in demand as either geo-political tension, economic uncertainty or hope of interest rate cut which could provide positive triggers. When we combine the global factors, we do believe that is giving mix signals. We would be focusing on equity market which is trading at fresh high and gold and silver which is also trading at life-time high. We see this as early signs of market factoring in lower interest rate, economic growth and geo-political tensioned could also get eased out. Click on the attachment to read the full report posted above 👆👆 Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Equichain Wealth Advisors - Election strategy For portfolio / long term investment / Concept Investment 1) Allocation level around 75% & Keep cash level around 25% - Keep balance approach ahead of binary event. 2) We have reduced / booked part profit in PSU which has run-up in last 6 months to 1 years 3) Fresh exposure preferred in private banks - Equichain valuation matrix report posted in this week. For short term trade / trading portfolio / F&O position (if any - should be hedged) 1) Keep exposure level around 65% & take fresh long on indices through - Call Options - Buy position (limited risk) 2) Focus on Infrastructure stocks other than PSU - such as LT & Cement. Metal stocks are buzzing on China factor and individual stock story - HINDALCO. 3) F&O position - we would prefer long position in Banknifty. 4) IT stocks will play as defensive / contrarian trend. IT stocks could remain weak based on global cues. We are bullish on Banknifty more compared to Nifty with a view on election result day. Key points 1) Market will react to EXIT poll on Monday (EXIT poll will come on Saturday). 2) Election result on 4-Jun-24 - We have shared our estimate and view based on number of seats BJP gets on standalone basis whether NDA manages to cross 400+ mark. 3) We would avoid taking any fresh trade in next week and capital protection remains priority as market is expecting high volatility. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

We are booking part profit in Defense PSU which part of our Equichain Flexi-cap concept & maintain exposure in Banking stocks.........going by the strategy to keep allocation below 80% Avoid judging market for one week based on event and we would prefer to keep balancing approach.............as mentioned earlier on this channel. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Nifty @ 22558 & Banknifty @ 48584 & VIX @ 24 We see weakness this week is mainly due to F&O expiry and weak global cues added to the pressure. Narrative in market can turn extreme in next few trading session............ 1) Today - Final F&O expiry - we see this as buying opportunity in case of under invested. 2) Tomorrow - Fresh series starts - we are expecting up move as some build ahead of exit poll on Saturday. 3) Monday 3-Jun-24 - Market will react to EXIT poll numbers - Expect high volatility. 4) Tuesday 4-Jun-24 - General election result - Expect high volatility. Our strategy would be to avoid any big trade and seat on sideline and follow our capital allocation strategy. Current capital allocation strategy: Allocation around 75% - 80% & any speculative position with election result view to be hedged Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Nifty moved above 22775 is open further upside up to 23251 & 23501 and now 22368 to act as important support level. Nifty RSI @ 67.77 & RSI average @ 58.68 and once Nifty manages to cross 70 level momentum is expected to gain speed as market is headed for event. Banknifty looks far stronger as compared to Nifty and could open upside up to 51490 on higher side which is currently around 5% from current level. Banknifty @ 47897 to act as important support level in near term — from weekly report Nifty @ 22817 & Banknifty @ 48890 & VIX @ 24.17 Nifty took support around 22775 & Banknifty around 47897 - level mentioned in weekly report Till this levels holds on closing basis for this week - We remain bullish. Our strategy - keep exposure around 75% - 80%, we see this as opportunity to add fresh long within capital allocation strategy. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Rational on valuation – Defense companies – Book part profit • Defense stocks rally was supported by strong order book, improved margin and optimism of stable government policy. • Defense procurement through domestic companies and government policy on vocal for local has provided big boost to these companies. • Most of the defense companies are trading at recent high and stock prices has doubled within a very short period of time. • As this companies are manufacturing companies, increase in production capacity needs capex and takes time to deliver result. Rational on valuation – Banking stocks – Fresh addition • Banking sector is the life-line of economy and which directly reflect on its performance. • Apart from SBIN, most of the private banks has been trading in narrow range. • Credit growth has continued to remain robust and asset quality has been stable for private banks. • KOTAKBANK is down due to RBI restriction on fresh online business and we have initiated fresh buy in KOTAKBANK after sharp fall seen post RBI ‘s action. • Interest rate globally has peaked off and it is matter of time before rate starts coming down. As per current trend interest rate should start coming down from September / October 2024. Equichain Valuation Matrix: Strategy with view on election result on 4-Jun-24 As now focus will shift to 4-Jun-24, election result day – our strategy would be to book part profit and continue to hold part quantity with long term view and fresh investment to be review in banking stocks. We see price underperformance in banking stocks as buying opportunity as result in last few quarters has been encouraging and we expect positive earnings once BJP / NDA government returns. We believe, stocks market is trading at premium valuation for many PSU ‘s companies including defense stocks while private banks are trading at lower end of valuation or at discount compared to its historical price to Book value ratio. Click on the attachment to read the full report posted above 👆👆 Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf