{LONGTERMINVESTORS} Fwd: Daily Market Report - January 14, 2016

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From: <research@icicibank.com>
Date: Thu, Jan 14, 2016 at 6:26 PM
Subject: Daily Market Report - January 14, 2016
To: stockdesai@gmail.com

Domestic markets wrap-up Indian equity indices closed trade in the red, though morning's steep losses were trimmed during intra-day trade. Banking stocks were the major laggards today. Both Sensex and Nifty edged down 0.3% each. India's WPI remained in negative territory in December and came in at (-) 0.7% YoY, though lower than November's decline of 2.0% YoY. Rupee ended significantly weaker against the US Dollar, crossing the 67.0 level handle. USDINR cross settled at 67.29 levels vs. yesterday's close of 66.845 on the back of Dollar buying due to its safe haven demand. Most Asian currencies weakened relative to the greenback. Domestic bonds closed lower today as the Reserve Bank of India refused to accept any bids during its repurchase of 1.44% inflation indexed bonds. The old 10Y benchmark yield rose by 3 bps to end at 7.79% as against yesterday's close of 7.76%. The new 10Y benchmark closed at 7.63% vs. previous close of 7.61%. RBI provided liquidity to the tune of INR 1499.81 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of January 13th. It injected INR 23.18 bn and INR 6.50 bn under Special Refinance Facility and Marginal Standing Facility respectively. *Weighted Average (WAR) over the day  Global market developments Asian equities ended largely in the red today. Pessimistic finish on the US bourses yesterday continued to dampen market sentiment, leading to an equity rout. Anchoring of crude prices near 12-year lows also pushed the indices lower. Nikkei, Hang Seng, Kospi and Australia's ASX tumbled 2.7%, 0.6%, 0.9% and 1.6% respectively. Shanghai Composite, however, pared early morning losses, posting a sizeable increase of 2.0%. Dollar index is trading lower, at 98.67 levels. A steep sell-off in US equities has put pressure on the greenback. Concerns over subdued inflation and wage growth were also reported by the Federal Reserve's Beige Book. Meanwhile, the Euro has strengthened materially against the US Dollar and is trading at 1.0923 levels. GBPUSD cross, however, continues to trade under pressure at 1.4412 levels. Bank of England maintained status quo in its policy meeting today. Japanese Yen is trading flat vs. the US Dollar at 117.7 levels. US Treasuries are trading higher, extending early morning gains. Subdued market sentiment buoyed Treasury prices higher on the back of bearish run in global equities and concerns over economic recovery. The 10Y benchmark yield is at 2.06% vs. yesterday's close of 2.09%. Commodity market developments Oil witnessed a modest rebound during intra-day trade after trading below the crucial USD 30/bbl mark for the second time this week. EIA report indicated elevated crude and gasoline stockpiles last week in the US and weighed on oil prices. Going ahead, oil is slated to remain under pressure as markets await UN's decision on Iran's nuclear programme (this Friday), which could see Iranian sanctions being lifted soon. WTI and Brent are trading at ~USD 31/bbl each. Gold is trading with slight decline, albeit still holding on to yesterday's gains. Broadly, the bullion has been on the upward trajectory due to rising levels of global volatility and risk aversion on the back of global growth and crude price concerns. Regards, ICICI Bank Contact: Sagrika Gogia (+91-22) 4008-1414 (ext:2180) sagrika.gogia@icicibank.com

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CA. Rajesh Desai

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