{LONGTERMINVESTORS} Fwd: Morning Market Starter- February 26, 2016

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From: <research@icicibank.com>
Date: Fri, Feb 26, 2016 at 11:17 AM
Subject: Morning Market Starter- February 26, 2016
To: stockdesai@gmail.com

On the Radar: Markets await release of India's Economic Survey. US Q4 2015 GDP data (second reading) and January PCE inflation print will also be tracked closely.  Central Bank watch: San Francisco Fed President John Williams stated that given the markets were picking up momentum, "it only made sense" for Fed to continue its plan of gradual rate hikes. o Meanwhile, St. Louis Fed President James Bullard expressed his opposition regarding further rate hikes by the Fed, citing "declining market-based inflation expectations" as a cause for concern. o Atlanta Fed President Dennis Lockhart said that interest rate hikes and commercial real estate could pose threats to profitability of banks for the first time in decades. People's Bank of China Governor Zhou Xiaochuan stated that the Central Bank still had policy scope and required monetary tools to remedy situations if needed. Chart: Crude prices rallied overnight following reports of a meeting between key oil producers in March Global market developments: The 10th G-20 summit commenced in Shanghai today. Macroeconomic Data: o UK: Q4 2015 GDP print (second reading) came in as per expectations, at 0.5 % QoQ, same as prior reading. o EZ: Headline CPI for January (final reading) remained unchanged at 0.4% YoY. Core inflation also matched the previous print, coming at 1.0% YoY. o JN: Japan's headline inflation was flat in January, down from December's print of 0.2% YoY. Core inflation also witnessed a downtick, coming in at 0.7% YoY vs. prior of 0.8% YoY. US equities ended in the green yesterday. Rally in oil prices overnight gave support to the indices. Upbeat durables goods data for January also buoyed sentiment. Dow Jones and S&P gained 1.3% and 1.1% respectively. Asian equities are trading in the green this morning, tracking cues from their US peers. Nikkei (1.2%), Hang Seng (1.6%) and Shanghai Composite (0.8%) are posting gains. Following suit, Kospi (0.2%) and Australia's ASX (0.1%) have also edged up. US Treasuries are trading ranged today. The 10Y benchmark yield is currently at 1.72% same as yesterday's close. Global market snapshot Domestic market developments: RBI announced OMO purchases (post market hours yesterday) worth INR 120 bn to be conducted on March 3rd, 2016 through multi-security auction. The details of the securities will be announced later. UDAY bonds, a bailout scheme for defaulting state power distribution companies run by state governments, will not come up for routine auction or sale process conducted by the Reserve Bank of India on behalf of the states, as per recent commentary by the RBI. Railway Budget for FY2017 was presented yesterday. It emphasized the need to improve operational efficiency, customer satisfaction and laid out the long term vision for structural reforms of the Railways. The Railway Minister has envisaged a greater role for institutional sources through collaboration with multi-lateral agencies, pension and insurance funds and the PPP route. 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 Radhika Wadhwa (+91-22) 2653-1414 (extn: 2085) radhika.wadhwa@icicibank.com ​

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CA. Rajesh Desai

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