{LONGTERMINVESTORS} Fwd: Morning Market Starter- June 2, 2016

---------- Forwarded message ----------
From: <research@icicibank.com>
Date: Thu, Jun 2, 2016 at 11:14 AM
Subject: Morning Market Starter- June 2, 2016
To: stockdesai@gmail.com

On the radar: Markets await ECB's monetary policy decision and US ADP employment change data for May, expected today. Further, the bi-annual OPEC meeting in Vienna, scheduled for today, will be closely eyed. Key developments today The Government announced the FY2017 minimum support prices for major Kharif crops largely based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). To incentivise cultivation of pulses and oilseeds, the Government has announced a bonus on these crops (payable over and above the approved MSP) to the tune of INR 425/quintal for Kharif pulses, INR 200/quintal for Sesamum and INR 100/quintal for other kharif oilseeds. Central Bank watch: Fed's Beige Book report highlighted "tight labour market conditions amid modest growth" in the US. Some uptick was noted in wages and consumer spending. Meanwhile, softness in energy sector remained a cause for concern. Global market developments: Macroeconomic Data: o SZ: Q1 2016 GDP print came in lower at 0.1% QoQ as against 0.4% QoQ previously. o UK: Manufacturing PMI entered the expansionary territory (above 50 levels) with the reading for May at 50.1 (prior revised print: 49.4). Meanwhile, Nationwide house prices for May remained unchanged at 0.2% MoM. o US: ISM manufacturing index rose in May to 51.3, up from 50.8 in the previous month. o AU: Trade deficit narrowed in April to AUD 1.6 bn from the earlier (revised) reading of AUD 2.0 bn. Meanwhile, retail sales declined in April to 0.2% MoM as against 0.4% MoM earlier. US equities ended slightly in the green aided by higher than expected manufacturing data prints. However, caution ahead of crucial US jobs market data prints, due today and tomorrow, capped gains in the indices. While S&P gained 0.1%, Dow Jones ended flat. Asian equities are trading mixed this morning. Strength in the Yen is weighing on Japanese stocks today. Nikkei (-2.5%) is posting steep losses followed by Australia's ASX (-0.9%). On the other hand, Hang Seng, Kospi and Shanghai Composite are trading higher by 0.1% each. US Treasuries are trading little changed this morning after the release of Fed's Beige Book report. The 10Y benchmark yield is at 1.83% as against yesterday's close of 1.84%. Chart: US ISM manufacturing index rose in May to 51.3 from the previous print of 50.8 Global market snapshot Domestic market developments: Indian Rupee is trading stronger vis-à-vis the US Dollar at 67.34 levels as against yesterday's close of 67.45. Indian equities opened ranged this morning. Nifty and Sensex are trading lower by 0.1% each. Indian Government bonds are trading higher this morning. The 10Y benchmark yield is presently at 7.48% vs. yesterday's close of 7.49%. 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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