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

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From: <research@icicibank.com>
Date: Mon, Feb 29, 2016 at 6:01 PM
Subject: Daily Market Report- February 29, 2016
To: stockdesai@gmail.com

Domestic markets wrap-up Indian equities ended in the red, following a volatile session on account of tabling of the Union Budget for FY 2017 today. Domestic equities posted steep losses ahead of the Budget. However, some of these losses were corrected thereafter, led by gains in oil and gas and consumer durable stocks. Downbeat cues from Asian stocks also weighed on market sentiment. Sensex and Nifty ended 0.7% lower each, with Nifty slipping below 7000 levels. Rupee ended stronger against the US Dollar, at 68.43 levels vs. Friday's close of 68.62. Domestic currency appreciated following the announcement of the Union Budget for FY2017, wherein the Finance Minister adhered to the fiscal consolidation roadmap with the fiscal deficit target for FY2017 unchanged at 3.5% of GDP. However, reported Dollar demand by banks and losses in domestic equities capped the upside in the Rupee. Domestic bonds closed notably higher today, extending Friday's gains. Government's adherence to the fiscal consolidation path in the Union Budget for FY2017 provided support. Appreciation in the Rupee also aided gains in Government bonds. The 10Y benchmark yield closed at 7.63% vs. Friday's close of 7.78%. RBI provided liquidity to the tune of INR 1696.6 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of February 26th. It injected INR 23.36 bn under Special Refinance Facility. Global market snapshot *Weighted average of the day Global market developments Asian equities ended in the red today, extending early morning losses. Concerns over China and volatile movements in oil dampened market sentiment. In other news, People's Bank of China (PBoC) announced a cut of 50 bps in its reserve ratio requirements post market hours today. Shanghai Composite (-2.9%), Kospi (-0.2%), Nikkei (-1.0%), Hang Seng (-1.3%) posted material losses. Meanwhile, Australia's ASX ended flat. Dollar index is trading firm at 98.26 levels. Pound is trading weaker against the US Dollar, at 1.3862 levels as Brexit concerns continue to weigh on the Sterling. Euro is trading significantly lower vs. the US Dollar at ~1.08 levels on account of negative inflation reading in February ((-)0.2% YoY vs. prior of 0.3% YoY). Japanese Yen is trading stronger vs. the US Dollar at 112.89 levels, on the back of safe haven demand for the currency due to downbeat sentiment. US Treasuries are trading higher today. Downbeat finish in Asian stocks drove investors toward the risk-free sovereign bonds. The 10Y benchmark yield is at 1.74% vs. previous close of 1.76%.   Commodity market developments Oil is trading mixed today. Crude prices have received support from reports indicating a decline in US rig count for the 10th consecutive week to 400, its lowest level since December 2009. However, concerns regarding oversupply continue to hurt sentiment. WTI and Brent are currently trading at USD 33/bbl and USD 35/bbl respectively. Gold is trading higher, paring Friday's losses. Demand for the safe haven metal has firmed up amid weakness in risk sentiment owing to volatile market movements. The yellow metal is currently trading at USD 1234/oz. Regards, ICICI Bank Contact: Sagrika Gogia (+91-22) 2653-1414 (extn: 2180) sagrika.gogia@icicibank.com Sonal Surana (+91-22) 2653-1414 (extn: 2087) sonal.surana@icicibank.com ​

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CA. Rajesh Desai

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