{LONGTERMINVESTORS} Fwd: Daily Market Report- February 2, 2016

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From: <research@icicibank.com>
Date: Tue, Feb 2, 2016 at 6:23 PM
Subject: Daily Market Report- February 2, 2016
To: stockdesai@gmail.com

Key developments today Reserve Bank of India (RBI) maintained status quo and kept policy rates unchanged in its policy decision today. Domestic markets wrap-up Indian equities ended today's session in the red, tracking cues from global markets. Metal and private sector banks were the major laggards. Nifty and Sensex have edged down 1.3% and 1.2% respectively. Rupee weakened against the Dollar today on the back of reported Dollar demand by state-owned banks. Further, the slightly hawkish tone of the RBI at its policy meeting and losses in local indices also weighed on the domestic currency. The USDINR pair closed at 67.98 levels vs. prior close of 67.84. Domestic bonds ended lower today as RBI commentary on inflation and liquidity dampened market sentiment.  The 10Y benchmark yield closed at 7.72% vs. yesterday's close of 7.66%. RBI provided liquidity to the tune of INR 1486.87 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of February 1st. It injected INR 22.33 bn and INR 3.10 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. Markets pared last week's gain as the rally from BoJ's surprise monetary stimulus ended with oil prices resuming their downward trajectory. Nikkei (-0.6%), Kospi (-1.0%), Australia's ASX (-1.0%), Hang Seng (-0.8%) posted losses. However, Shanghai Composite ended up 2.3%. Dollar index is trading slightly lower today at 98.98 levels. Japanese Yen advanced against the greenback, paring some of its recent losses. The Yen had fallen ~2% post the adoption of negative interest rates by BoJ. However, weakness in global risk sentiment is aiding demand for the safe haven currency. Euro is trading higher against the Dollar at 1.0922 levels. Meanwhile, the Pound is trading marginally weaker vis-à-vis the US Dollar. Going ahead, markets await Bank of England (BoE) policy decision due later this week for further cues. US Treasuries are trading higher today as weak global risk sentiment boosted demand for US debt. The 10Y benchmark yield is at 1.93% vs. yesterday's close of 1.95%. Commodity market developments Crude oil is trading lower today. Rising OPEC oil supply, concerns over a slowdown in China (second largest oil consumer) and expectation of a rise in US crude oil inventories weighed on oil prices. WTI and Brent are trading at ~USD 31/bbl and ~USD 33/bbl respectively. Gold is trading lower, albeit holding on to recent gains. Dampened risk sentiment has boosted demand for the yellow metal in recent trade. Meanwhile, investment demand as reflected by holdings in SPDR Gold Trust rose by 12.2 metric tonnes yesterday. Gold is currently trading at ~USD 1124/oz. Regards, ICICI Bank Contact: Niharika Tripathi (+91-22) 4008-1414 (ext:6943) niharika.tripathi@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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