{LONGTERMINVESTORS} Fwd: Daily Market Report- January 29, 2016

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From: <research@icicibank.com>
Date: Fri, Jan 29, 2016 at 8:07 PM
Subject: Daily Market Report- January 29, 2016
To: stockdesai@gmail.com

Domestic markets wrap-up India's April-December fiscal deficit stands at 87.9% of the FY2016 budgeted target vs. 100.2% in the corresponding period last year. December fiscal deficit came in at INR 46.62 bn vs. November's print of INR 722.8 bn. Indian equities ended in the green today. Market sentiment was buoyed by additional easing measures announced by the Bank of Japan in its policy decision today, in addition to a rally in oil prices. Sensex and Nifty surged 1.6% and 1.9% respectively. Rupee ended stronger against the US Dollar today, settling at 67.78 levels vis-à-vis yesterday's close of 68.23. Reported Dollar sales by exporters led to appreciation in the domestic currency. Further, bullish trade on the local bourses aided the Rupee's appreciation. Domestic bonds ended higher today with strength in the Rupee triggering gains in gilt prices. Despite devolvement of 8.13%, 2045 bond in today's auction of INR 140 bn worth of Government's debt, cut-off yields (on other securities) remained largely in line with expectations. The 10Y benchmark yield ended at 7.64% vs. yesterday's close of 7.69%. RBI provided liquidity to the tune of INR 1691.2 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of January 28th. It injected INR 22.33 bn and INR 1.35 bn under Special Refinance Facility and Marginal Standing Facility respectively. *Weighted Average (WAR) over the day Global market developments Asian equities ended in the green today. Bullish sentiment prevailed in Asian markets post BoJ's policy announcement to implement negative interest rates on excess reserves. Shanghai Composite (3.1%), Nikkei (2.8%), Hang Seng (2.5%) posted steep gains. Kospi (0.3%) and Australia's ASX (0.6%) also edged higher. The Dollar index is trading higher today at 99.15 levels. US Q4 2015 GDP (advance estimate) came in at 0.7% QoQ (prior: 2.0% QoQ). Euro has weakened against the US Dollar at 1.0879 levels, albeit holding on to bulk of earlier gains. Eurozone's January CPI print remained in line with expectations, showing a slight uptick and thereby capping losses in the common currency. Pound is also trading weaker relative to the greenback trimming yesterday's gains. The Japanese Yen has posted sizeable depreciation against the US Dollar and is trading above the 120 handle. The introduction of negative interest rates on excess reserves by the Bank of Japan in its policy decision today is weighing on the Yen. US Treasuries are trading higher today, extending recent gains. The 10Y benchmark yield is at 1.93% vs. yesterday's close of 1.98%. Commodity market developments Oil is trading slightly higher today amid expectations of production cuts on the back of news regarding possible talks between Russia and OPEC members. WTI and Brent are trading at ~USD 34/bbl each. Gold is trading lower on the back of strength in the greenback post BoJ's policy announcement. However, uncertainty in global environment is likely to cap the downside. Regards, ICICI Bank Contact: Sagrika Gogia (+91-22) 4008-1414 (ext:2180) sagrika.gogia@icicibank.com Sonal Surana (+91-22) 4008-1414 (ext:2087) sonal.surana@icicibank.com

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CA. Rajesh Desai

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