{LONGTERMINVESTORS} Fwd: Daily Market Report- February 4, 2016

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From: <research@icicibank.com>
Date: Thu, Feb 4, 2016 at 6:44 PM
Subject: Daily Market Report- February 4, 2016
To: stockdesai@gmail.com

Domestic markets wrap-up RBI has announced (post-market hours) OMO purchase worth INR 100 bn scheduled to be held on Monday. Indian equities ended in the green today, tracking positive cues from Asian equities and rallying oil prices. Gains in banking, IT, energy and oil & gas stocks lifted the domestic bourses higher. Sensex and Nifty edged up 0.5% and 0.7% respectively. Rupee ended materially stronger against the US Dollar, at 67.54 levels as against yesterday's close of 68.07 levels. Steep overnight depreciation in the greenback led to gains in the domestic currency. Reported Dollar bids by banks aided Rupee gains, coupled with a positive finish on the local bourses. Domestic bonds closed higher today, extending yesterday's gains. Strength in the Rupee kept gilts buoyed, though a rally in oil tempered gains. Further, the Government bought back INR 166.50 bn worth of 2016 bonds today, lower than the stipulated quantum of INR 200 bn. The 10Y benchmark yield closed at 7.71% vs. yesterday's close of 7.73%. RBI provided liquidity to the tune of INR 1172.04 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of February 3rd. It injected INR 20.53 bn and INR 0.40 bn under Special Refinance Facility and Marginal Standing Facility respectively. *Weighted Average (WAR) over the day Global market developments Asian equities ended broadly in the green, tracking cues from the rally in US markets. Market sentiment got a fillip from the steep surge in crude prices. Kospi (1.4%), Australia's ASX (2.1%), Shanghai Composite (1.5%) and Hang Seng (1.0%) traded in the green. However, Nikkei (-0.9%) finished in the negative territory. Dollar index is trading lower at 96.77 levels. Downbeat data prints and dovish commentary by Fed official Dudley continues to weigh on the greenback. Both Euro and Japanese Yen are trading stronger vs. the US Dollar on account of weakness in the latter. However, the Euro might come under some pressure ahead as the ECB cut down its 2016 growth and inflation forecast for the Euro area in its Economic Bulletin released today. British Pound is also trading stronger vs. the Dollar, at 1.4589 levels, though retracing slightly following Bank of England's (BoE) policy decision. BoE maintained status quo in its policy decision today, with bank rate at 0.5% and size of asset purchase programme at GBP 375 bn. The commentary by the Central Bank remained dovish, citing persistence of downside risks to the 2016 inflation outlook. US Treasuries are little changed today, albeit holding on to early-morning losses. The 10Y benchmark yield is at 1.90% vs. yesterday's close of 1.89%. Commodity market developments Oil is trading mixed, though overnight gains remain overarching. EIA inventory data reported a higher than expected build-up of inventories in the US last week, leading crude to trim some of its previous gains. In other news, there are reports of a meeting between OPEC members Venezuela and Qatar regarding potential production cuts following positive cues from Venezuela's oil minister. WTI and Brent are trading at ~USD 32/bbl and ~USD 35/bbl respectively. Gold edged higher today, extending sharp gains from yesterday. Dollar weakness led the bullion to trade higher. The yellow metal is trading at USD 1145/oz. 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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