{LONGTERMINVESTORS} Daily Market Report- March 29, 2016

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From: <research@icicibank.com>
Date: Tue, Mar 29, 2016 at 6:09 PM
Subject: Daily Market Report- March 29, 2016
To: stockdesai@gmail.com

Domestic markets wrap-up RBI issued guidelines clarifying directions on Marginal Cost of Funds based Lending Rate (MCLR) system which comes into effect on April 1st, 2016. RBI also issued notification regarding investment by Foreign Portfolio Investors (FPI) in Government Securities. Indian equities ended in the red, tracking cues from their Asian peers. Intraday trade, remained choppy amid lack of crucial directional cues as investors wait on the sidelines for RBI's monetary policy meet next week. Pharma stocks were the major laggards. Sensex and Nifty edged lower by 0.3% and 0.2% respectively. Rupee ended stronger vis-à-vis the US Dollar, at 66.54 levels as against yesterday's close of 66.64. Reported Dollar sales by banks and FIIs provided support to the Rupee. However, downbeat finish on the local bourses contained the upside. Domestic bonds ended slightly lower today. Reported profit-booking by state-owned banks ahead of annual closing of accounts on April 1st, 2016 weighed on gilts. However, strength in the Rupee and continued hopes of a rate cut by the RBI in its policy meeting next week capped losses. The 10Y benchmark yield closed at 7.51% vs. yesterday's close of 7.50%. RBI provided liquidity to the tune of INR 2282.97 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of March 28th. It injected INR 24.81 bn and INR 3.76 bn under Special Refinance Facility and Marginal Standing Facility respectively. Global market snapshot   *Weighted average of the day Global market developments Asian equities ended mixed today, ahead of Fed Chair Janet Yellen's speech today. Crude price declines further weighed on the indices. On the data front, retail sales in Japan contracted further this month, with the data coming in at (-) 2.3% MoM as against previous reading of (-)1.1%. Nikkei (-0.2%), Shanghai Composite (-1.3%) and Australia's ASX (-1.6%) posted losses. Meanwhile, Kospi (0.6%) and Hang Seng (0.1%) closed higher. Dollar index is trading lower at 95.89 levels as soft PCE inflation and spending data continued to weigh on the greenback. Speeches by key Fed officials this week, including Janet Yellen, are expected to guide the US Dollar. Lack of major directional cues are likely to render movements in the greenback as the dominant trigger. The Pound is trading stronger at 1.4288 levels. The Euro is also trading stronger vs. the greenback at ~1.12 levels. Meanwhile, Japanese Yen is trading weaker at ~113 levels amid weak retail sales data and market-wide anticipation of further stimulus by the Bank of Japan (BoJ). US Treasuries are trading higher today, as investors flock to safe haven assets amid uncertainty ahead of Fed officials' speeches and continued decline in oil prices. The 10Y yield is trading at 1.86% vs. yesterday's close of 1.89%.   Commodity market developments Oil is trading significantly lower today, as investors remain cautious ahead of crucial US crude stockpiles data from the American Petroleum Institute (API) (due later today) and US Energy Information Administration (EIA) (due tomorrow). WTI and Brent are currently trading at USD 39.0/bbl each. Gold is trading lower, trimming overnight gains. The safe haven metal is under pressure as markets await cues from Janet Yellen's speech later today. The yellow metal is currently trading at USD 1220/oz.    Regards, ICICI Bank Contact: Sagrika Gogia (+91-22) 2653-1414 (extn: 8981) sagrika.gogia@icicibank.com Radhika Wadhwa (+91-22) 2653-1414 (extn: 7206) radhika.wadhwa@icicibank.com Sonal Surana (+91-22) 2653-1414 (extn: 7243) sonal.surana@icicibank.com ​

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CA. Rajesh Desai

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