EquiChain Wealth

Nifty @ 24138 & Banknifty @ 49698 & VIX @ 16.19 Market technical remains weak going into key event - we remain cautious and expect correction in 2nd half of August. 1) U.S. CPI & Core CPI data - due today evening. 2) Independence day speech - It will be first speech of Modi 3.0 We would prefer to increase cash level as technical chart is weak, momentum is broken and major correction can be expected once Nifty goes below 23980. We remain cautious.............. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Nifty @ 24190 & Banknifty @ 50276 & VIX @ 16.68 We would prefer to use this consolidation / correction - as opportunity to accumulate gradually. Nifty @ 23893 - (Monday's low) - to act as important support level. Accumulate gradually in next 1 - 3 trading session with eye of this two important factors 1) Nifty holding on Monday's Low 2) VIX trades around 16 & remain below 20 RBI MPC Policy - unchanged We see RBI MPC Policy in-line with estimate and could provide positive reaction to banking stocks in coming 2 - 3 trading session. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

JPMorgan Says Carry Trade Unraveling Is Only Half Complete Read more at: https://www.ndtvprofit.com/economy-finance/jpmorgan-says-carry-trade-unwind-is-only-half-complete?src=p1 Copyright © NDTV Profit

Equichain Valuation Matrix – YEN Carry trade and its impact on Indian market Today we will discuss recent event which triggered major sell-off in global market, YEN Carry trade unwinding. Bank of Japan in its recently concluded meeting on 31-Jul-24 raised interest rate to 0.25%. BOJ was following negative interest rate policy until it changed to 0% - 0.10% on 19-Mar-24, raising interest rate for the first in more than 17-years. BOJ has raised rates twice this year to current level at 0.25%. What is Carry Trade? Carry trade is a popular concept in the currency market, where investors borrow low-yielding currencies to invest in high-yielding currencies. Carry Trade Unwinding - Explanation When YEN gets strong against U.S. Dollar as BOJ is raising interest rate and exit from negative interest rate policy and BOJ current interest rate is at 0.25% while US Fed will be reducing rate as interest rate in U.S. had peaked. US Fed it is meeting outcome on 31-Jul-24 kept rate unchanged but indicated rate cut in next FOMC meeting on 18-Sep-24. Equichain Valuation matrix: Strategy on equity market due to global impact of Carry Trade unwind. I have tried to explain Carry trade unwinding in simple way which I understand. This event has potential domino effect on global risk-on asset class as investor could rush on to liquidate position which could trigger is squeeze. We have seen similar situation back in 2008 – 09 and it could trigger risk-off across the asset classes. Any correction above 8% - 12% from recent high on indices and stocks correction in range of 30% to 50% could be seen as distress level buying opportunity. We would prefer to have stock specific approach and expect further correction in current month – August 2024. 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

Profit Explains: Here's How Yen's Appreciation Is Affecting Carry Trade Read more at: https://www.ndtvprofit.com/global-economics/yen-appreciation-impact-on-carry-trade-japanese-yen-us-dollar-exchange-rate?src=topwid Copyright © NDTV Profit

GIFT Nifty down by 360 points 😱😱 Last time market seen - Carry Trade Unwind was in 2008

Global Carry Trade Unwind Extends As Peso Sinks, Yen Surges Read more at: https://www.ndtvprofit.com/global-economics/global-carry-trade-unwind-extends-as-peso-sinks-yen-surges?src=topwid Copyright © NDTV Profit

Last week – review Indices started this week on strong note after ICICIBANK result last Saturday which meet the market estimate. Indices closed this week flat after weakness due to profit booking and global weakness on Thursday & Friday. Indian market managed to outperform global peers. Technical Insight Nifty RSI @ 60.39 & RSI average @ 67.90. Nifty seen reversal on Thursday & Friday as Nifty failed to cross 25175 and faced resistance around 25078. Nifty immediate support level at 24418 and Nifty is expected to take major support at 24010 level. Nifty above 25078 could see trend reversal. Banknifty RSI @ 46.10 & RSI average @ 48.59. Banknifty last week took support at 50813 level and will continue to act as near-term support level. Banknifty range 51780 to 52020 to act as resistance level. Technical setup going into trade next week is downward and trend reversal can be seen once Nifty @ 25078 & Banknifty @ 52020 is crossed on strong note. We see indices could see further correction as technical setup has turned negative and any up move / attempt to up move / consolidation could be seen as opportunity to sell or reduce exposure or hedge. Fundamental Insight 1) GST Collections in July Reach Rs 1.82 Lakh Crore, Rise 10.3% Annually 2) ITR Filings Surge to New High Of 7.28 Crore by July 31 3) India's April-June Fiscal Deficit Reaches 8.1% Of FY25 Target Equichain Wealth Advisors: Market View & Strategy Market made fresh 52-week high and some profit booking from higher level is warranted and healthy for long term. We have remained cautious in last few weeks and turned positive last week and will turn cautious again going into trade next week. Any correction up to 3% to 5% from recent high can be seen as positive with long term view and it will provide buying opportunity. RBI MPC Meeting outcome on 8-Aug-24 and earnings of few PSU ‘s will be in focus. Most PSU ‘s has seen profit booking post budget as PSU ‘s has seen sharp up move in last few months. We expect PSU ‘s will continue to see profit booking. 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 – BOJ, U.S. Fed & U.S. Economic data We see this week as most eventful week seen in last few months. BOJ & U.S. Fed meeting outcome on 31-Jul-24 and key economic data from U.S. has drive the global sentiment. BOE meeting this week which cut interest rate by 25 bps, first in four years was also historic move. We would also focus on Gold which is trading near $2500 and market corrected on recession fear on weak economic data. Bank of Japan – raises rate to 0.25% Japan's central bank has raised the cost of borrowing for only the second time in 17 years as it tries to normalize monetary policy in the world's fourth largest economy. The Bank of Japan (BoJ) increased its key interest rate to “around 0.25%” from the previous range of 0% to 0.1%. U.S. FOMC meeting outcome – Holds rate but keeps door open for September rate cut Yet even as it held rates at their current level of about 5.5%, the Federal Open Market Committee's latest statement included changes in language that acknowledged growing signs of economic weakness that suggest a greater willingness to consider lowering borrowing costs. Bank of England – Cuts rate by 25 bps Policymakers ultimately voted 5-4 in favor of the reduction, with Governor Andrew Bailey saying that the committee would move ahead cautiously. The Bank rate had been held at a 16-year high of 5.25% since August 2023. Equichain Wealth Advisors: Market View & Opinion Next U.S. Fed meeting is schedule on 18-Sep-24 and market is now factoring 100% probability of 25-bps rate cut and after recent set of weak economic data it is showing 74% probability of 50-bps rate cut by U.S. Fed. Only weak economic and soft inflation will prompt U.S. Fed to cut interest rate sooner than earlier guided for only one rate cut in 2024. We expect volatility to increase in coming months as weak economic data will raise hope of rate cut while strong economic data will indicate soft landing. Historically August month sees near term bottom formation for market and we see the starting of August month which could continue its trend to form near term bottom after correction of 5% to 8% from recent high. 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

Trade setup for 2-Aug-24 Global cues are weak on back of weak U.S. economic data & geo-political tension. Indian indices seen supply from higher level as Nifty tested 25000 level mark and manage to close at 25010.90. GIFT Nifty indicates 220 - 250 points gap-down opening, around 1% down. Any correction in the range of 3% - 5% from recent high can be seen as opportunity to deploy available fund. Market in near term seeing sign of supply at higher level and fatigue. Market correction is not ruled out as recent correction is backed by weak U.S. economic data and domestic event like budget is over and we are near to end of Q1FY25 earnings season.

HDFCBANK @ 1629 Accumulate / Hold Key triggers - 1) HDB Financials - IPO (approved along with last quarter result) 2) Most private banks reported their earnings & most PSU also declared their quarterly result - SBIN due on 3-Aug-24 U.S. Fed meeting on 31-Jul-24 - If U.S. Fed signals rate cut in September - it could trigger another round of rally in IT & Banks. Rationale for bullish view on - IT & Banks for some time now. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Defense stocks - most defense companies are yet to announce it quarterly result. BEL - result due today HAL & BDL - Quarterly result for Q1FY24 not declared yet. Defense budget has been kept higher and indigestion continues to remain long term story Short term - Valuation remain concern but we don't see major sell-off & any positive surprise from quarterly earnings could help. We maintain view on defense stocks - Accumulate with quarterly result view Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Last week – review Indices traded in range with very little impact or volatility due to budget and F&O expiry this week for July series. Although budget did provide some volatility but indices traded in range. IT stock lead the rally on Friday and if we exclude Friday’s move in market indices were mostly in negative on weekly basis. HDFCBANK reacted to its result on last Saturday and AXISBANK disappointment was the reason for underperformance of Banknifty. Technical Insight Technical trend looks positive and we see Nifty @ 24499 & Banknifty @ 50813 as immediate support level and fresh up move could be seen once Nifty manages to hold above 24854 & Banknifty above 51718. Nifty could test 25175 & Banknifty could re-test 53180, high seen in beginning of July 2024. Our approach would be to remain bullish as market on upside will be in unchartered territory and turn bearish only if important support level are broken that is Nifty @ 24279 & Banknifty @ 49350. Fundamental Insight 1) Budget 2024: Government Retains FY25 Capex Outlay at Rs 11.11 Lakh Crore 2) Budget 2024: Government Sets Aside Rs 1.52 Lakh Crore for Agriculture, Allied Sectors In FY25 3) Economic Survey 2024: India's GDP Growth Projected At 6.5-7% In FY25 4) Budget 2024: Fiscal Deficit Target Revised To 4.9% Of GDP For FY25 5) India's Financial System Stronger Than Ever: RBI Deputy Governor Rao Equichain Wealth Advisors: Market View & Strategy IT stocks led the rally last week as global cues were supportive and hope of September 2024 rate cut by US Fed remains. Banks were under pressure as HDFCBANK, KOTAKBANK which declared their quarterly result last Saturday and AXISBANK came out with result on Wednesday have increase provision which led to correction in banking stocks. ICICIBANK is due to declare its result on 27-Jul-24. We have maintained our exposure around 75% - 90% level as part of our capital allocation strategy, as new fund to be deployed only on major correction. There is no major negative news on economic front or any major disappointment on corporate earnings front back home. We see Budget as continuity from last few budgets post COVID-19 which announced capex at 11.11 lakh crores. We expect market trend to remain in range as BOJ meeting & US Fed meeting on 31-Jul-24 could provide some volatility. We would continue to have stock specific approach while keeping exposure in range 75% to 90%. 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 – September 2024 rate cut hope remains alive In today’s article we will discuss how the September FED meeting rate cut hope remain alive as economic data remains mix. U.S. Q2 GDP data released on Thursday came above estimate and Core PCE data released on Friday which came in-line with estimate keeping hope of rate cut alive in September FOMC meeting. U.S. Economic data • Flash Manufacturing PMI @ 49.5, estimate @ 51.6 & Previous @ 51.6 • New home sales @ 617k, estimate @ 639k & Previous @ 621k • Advance GDP q/q @ 2.8%, estimate @ 2.0% & Previous @ 1.4%. • Core PCE index @ 0.2%, estimate @ 0.2% & Previous @ -0.10%. U.S. economic data remain mix this week as strong GDP data triggered correction in global risk-on sentiment as hope of rate cut may get push beyond September 2024 FED meeting. While Core PCE price index released on Friday came in-line with estimate keeping rate cut hope alive. Bank of Japan meeting on 31-Jul-24 Bank of Japan is expected to increase rate from current 0.10% and move out of near about zero interest rate. Big investment banker and participants expecting rate increase by BOJ on 31-Jul-24. U.S. Fed meeting on 31-Jul-24 On 31-Jul-24, BOJ meeting outcome due earlier in the day while U.S. Fed due to announce its decision later on 31-Jul-24. Market is expecting interest rate to remain unchanged on 31-Jul-24 and Fed Chair Jerome Powell ‘s commentary will be important event to watch out for and any comment on possible rate cut in September 2024 meeting will be taken positively by global market. Equichain Wealth Advisors: Market View & Opinion Global earnings continue to remains stable with no surprises on either side and global market continues to focus on centrals banks and its move on interest rate. We would like to highlight on fact that market is betting that U.S. Fed and ECB are expected to cut interest rate in their September meeting while BOJ is expected to raise interest rate and exit near zero interest rate policy, currently 0.10% as inflation rises. We continue to maintain our view shared last week as mentioned above, global risk asset class such as Gold & other commodity, Dollar Index and bond yield continues to remain mix but equity market continues to trade at fresh life-time high. Recent up-move in global equity market could get further boost from events due 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