{LONGTERMINVESTORS} Fwd: Morning Market Starter- April 25, 2016

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From: <research@icicibank.com>
Date: Mon, Apr 25, 2016 at 11:36 AM
Subject: Morning Market Starter- April 25, 2016
To: stockdesai@gmail.com

Central Bank watch: Bank of Japan (BoJ) in its semi-annual financial system report said that negative interest rates have been dampening profits of financial institutions and as a result are likely to cause some "gradual pullback" on loans. However, the report also cited that the Central Bank's policy has been cushioning the impact of headwinds coming from global uncertainty. o According to reports, BoJ may consider offering some respite to banks facing negative interest rates on excess reserves by offering negative interest rates on certain loans. The most likely instrument to be used to this end would be BoJ's Stimulating Bank Lending Facility that currently offers loans at a flat rate. Bank of England policy maker Gertjan Vlieghe highlighted the importance of deploying negative interest rates, adding that such considerations, however, must be carefully assessed for its positive impacts over the negative ones. Chart: Eurozone's manufacturing and services PMI in the month of April (preliminary reading) came in below expectations. Global market developments: Macroeconomic data: GE: Manufacturing PMI for April (preliminary reading) came in at 51.9 levels vs. previous print of 50.7. Meanwhile, services PMI came in slightly lower than prior levels, albeit in the expansionary territory, at 54.6 levels (previous print: 55.1). EZ: Data for manufacturing PMI and services PMI in April (preliminary reading) came in below expectations, with the reading at 51.5 levels (prior print: 51.6 levels) and 53.2 levels (previous print: 53.1) respectively. US equities ended largely flat on Friday. Some upward bias in crude prices overnight aided the indices.  However, downbeat earnings data from technical & IT companies coupled with caution ahead of FOMC policy meeting this week weighed on the indices. Dow Jones closed higher by 0.1% and S&P ended flat. Asian indices are trading in the red as investors hold caution ahead of key monetary policy decisions (FOMC and BoJ) slated for this week. Nikkei (-0.8%), Hang Seng (-0.6%), Shanghai Composite (-1.3%) and Kospi (-0.1%) are posting losses. Markets in Australia are closed on account of a holiday. US Treasuries are trading slightly higher today. The 10Y benchmark yield is currently at 1.88% vs. Friday's close of 1.89%. Global market snapshot Domestic Market Developments: The Rupee is trading weaker against the US Dollar at 66.66 levels vs. Friday's close of 66.49. Indian equities are trading in the red this morning, tracking cues from their Asian peers. Sensex and Nifty are trading lower by 0.5% and 0.2% respectively. Domestic bonds are trading slightly higher. The 10Y benchmark yield is at 7.46%, same as Friday's close. The second half of the Budget session of the Parliament has commenced today. Regards, ICICI Bank Contact: Sonal Surana (+91-22) 2653-1414 (extn: 7243) sonal.surana@icicibank.com Radhika Wadhwa (+91-22) 2653-1414 (extn: 7206) radhika.wadhwa@icicibank.com ​

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CA. Rajesh Desai

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