{LONGTERMINVESTORS} Fwd: Daily Market Report- June 27, 2016

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From: <research@icicibank.com>
Date: Mon, Jun 27, 2016 at 6:06 PM
Subject: Daily Market Report- June 27, 2016
To: stockdesai@gmail.com

Domestic market developments Indian equities ended largely flat today. Comments from UK Chancellor pointing out the use of contingency plans to rein in volatility in financial markets supported sentiment today. However, stocks of IT companies proved to be major laggard owing to downward revision in outlook for the sector following Britain's exit from the EU bloc. Nifty settled 0.1% higher, while Sensex ended flat. Indian Rupee ended little changed vis-à-vis the US Dollar at 67.95 levels vs. the prior close of 67.96. The domestic currency trimmed early morning gains owing to increased purchases for the US Dollar by state-owned banks to meet month-end payment obligations for oil-importers. Broad-based buoyancy in the greenback also put pressure on the Rupee today. Indian Government bonds ended slightly higher, holding on to early morning gains. Declines in Treasury yields aided domestic bonds today, though the upside was capped on the back of broad-based risk-aversion in global markets. The 10Y benchmark yield closed at 7.46% vs. yesterday's close of 7.47%. RBI provided liquidity to the tune of INR 405.73 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of June 24th. It injected INR 22.09 bn and INR 0.7 bn under Special Refinance Facility and Marginal Standing Facility respectively. Global market snapshot Global market developments Asian equities ended largely in the green today, trimming some of their post Brexit losses. In other news, Japanese Prime Minister Shinzo Abe reportedly directed finance minister Taro Aso to monitor developments in currency markets and to take additional steps, if necessary, in the emergency meeting called between Bank of Japan and the Japanese Government today. Nikkei (+2.4%), Shanghai Composite (+1.5%), Kospi (+0.1%) and Australia's ASX (+0.5%) ended higher. Meanwhile, Hang Seng (-0.2%) posted losses. The Pound Sterling continued to weaken against the US Dollar as Britain made a historic decision to exit the EU. Markets shrugged off comments by British FM George Osborne giving assurance to markets on the readiness of the Government and Bank of England to take any action deemed necessary. Markets are expected to track further cues from the new terms of agreement between the EU and UK. In addition, Central Bank measures will be keenly eyed. The Euro is also trading with a depreciation bias against the greenback. Meanwhile, the Dollar index has risen on the back of heightened risk-off sentiment in markets. Japanese Yen is trading at its highest level against the US Dollar since February 2014 on account of safe-haven demand. US Treasuries are trading steeply higher today in continued response to the Brexit vote. The 10Y benchmark yield is currently trading at 1.47% vs. the previous close of 1.56%. Commodity market developments Crude oil is trading lower, as markets continue to reel from the effects of UK's surprise decision to leave the EU. In other news, US oil drillers cut 7 oil rigs last week after three weeks of additions. WTI and Brent are currently hovering around USD 47/bbl and USD 48/bbl respectively. Gold is trading higher today as investors flock to the safety of the yellow metal. Holdings in SPDR Gold Trust rose 18.41 metric tonnes to 934.31 tonnes as of June 24th, 2016. Gold is currently trading at USD1331/oz, its highest level since July 2014. 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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