{LONGTERMINVESTORS} Fwd: Daily Market Report- June 1, 2016

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From: <research@icicibank.com>
Date: Wed, Jun 1, 2016 at 7:02 PM
Subject: Daily Market Report- June 1, 2016
To: stockdesai@gmail.com

Domestic market developments Indian equities ended in the green today as markets continued to respond positively to better than expected GDP and GVA numbers and upbeat manufacturing PMI data print for May. Gains were led by FMCG stocks. Nifty and Sensex closed 0.2% higher each. Indian Rupee ended weaker vis-à-vis the US Dollar at 67.45 levels as against the prior close of 67.26. The domestic currency lost ground amid media reports suggesting that RBI Governor Raghuram Rajan is not seeking a second term at the Central Bank. However, performance of local indices capped the downside. Indian Government bonds ended lower ahead of key US jobs market data, due on Friday. Weakness in the domestic currency also weighed on gilts. The 10Y benchmark yield closed at 7.49% vs. yesterday's close of 7.47%. RBI provided liquidity to the tune of INR 832.12 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of May 31st. It injected INR 24.35 bn and INR 0 bn under Special Refinance Facility and Marginal Standing Facility respectively. Global market snapshot *Weighted average of the day Global market developments Asian equities ended in the red today, tracking cues from their US counterparts, amid weak PMI data prints from Japan and China. Australia's Q1 2016 GDP surprised on the upside, coming in at 1.1% QoQ vs. the prior (revised) print of 0.7% QoQ. Despite this, Australian shares shrugged off the news in light of low inflation levels. In other news, Japanese Prime Minister Shinzo Abe delayed the scheduled sales tax hike (earlier slated for next year) by two-and-a-half years. Nikkei (-1.6%), Hang Seng (-0.3%), Shanghai composite (-0.1%) and Australia's ASX (-1.0%) ended lower. Meanwhile, Kospi ended flat, though with a negative bias. The Dollar index is trading weaker at 95.50 levels amid mixed data prints (while PCE inflation edged up consumer confidence and Chicago PMI came in lower in May). Pound is trading weaker against the US Dollar amid resurfacing Brexit concerns as recent poll results showed votes favouring the "leave" side. UK's Nationwide house prices for May came in unchanged at 0.2% MoM, albeit lower than forecasted levels of 0.3% MoM. However, manufacturing PMI crossed over to the expansionary territory, coming in at 50.1 up from its previous (revised) print of 49.4, capping losses for the Sterling. Euro is trading stronger vis-à-vis the greenback on account of weakness in the latter today. Yen is trading with an appreciation bias, retracing to its ~110 levels today. US Treasuries are trading higher today. Going ahead, US jobs data (due Friday) will be closely tracked. The 10Y benchmark yield is currently at 1.82% vs. yesterday's close of 1.85%. Commodity market developments Oil is trading lower today as markets wait on the side lines of the OPEC meeting tomorrow. Recent plans by Iraq to increase output have weighed on the commodity. WTI and Brent are trading at USD 48/bbl and USD 49/bbl respectively. Gold is trading slightly higher today as weakness in Asian indices and some softness in the greenback supported demand for the safe haven bullion. Going ahead, markets await Friday's release of US NFP reading for cues regarding Fed's next policy move. The yellow metal is presently trading at USD 1219/oz. 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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