{LONGTERMINVESTORS} Fwd: Daily Market Report- July 4, 2016

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From: <research@icicibank.com>
Date: Mon, Jul 4, 2016 at 8:21 PM
Subject: Daily Market Report- July 4, 2016
To: stockdesai@gmail.com

Key developments today IMD reported that the southwest monsoon has further advanced into some more parts of Gujarat, remaining parts of East Rajasthan and some parts of West Rajasthan. Domestic market developments Indian stocks ended in the green amid upbeat momentum in their Asian counterparts. Increased bets of stimulus measures by key Central Banks and progress of monsoon aided the indices today. Further, hopes of passage of the crucial GST bill in the upcoming monsoon session of Parliament, commencing on July 18th continue to lend positive cues to the markets. Nifty and Sensex ended 0.5% higher each. The Indian Rupee ended slightly stronger against the Dollar at 67.27 as compared to 67.32 previously. Reported Dollar sales by foreign institutional investors and upbeat performance in local bourses aided the domestic currency today. However, trade remained largely thin on account of US market holiday. Further, reported Dollar purchases for commodity importers capped the upside. Indian Government bonds ended flat today. While some gains in the domestic currency lent positive cues to the bonds, slight profit booking and gains in crude prices limited the rise in gilts. The 10Y benchmark yield ended at 7.42%, same as previous close RBI withdrew liquidity to the tune of INR (-) 22.58 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of July 1st. It injected INR 22.14 bn and 47.00 bn under Special Refinance Facility and Marginal Standing Facility respectively. Global market snapshot * Weighted Average (WAR) over the day ** US market holiday Global market developments Asian equities ended in the green today, continuing their post-Brexit recovery. Prospects of easing by major Central Banks (BoE, BoJ and ECB) this month supported gains in the markets today. Further, intraday gains in crude anchored the indices. Reserve Bank of Australia's policy decision, due tomorrow, will now be turned to for crucial cues. Nikkei (0.7%), Hang Seng (1.8%), Shanghai Composite (0.1%), Kospi (0.9%) and Australia's ASX (0.3%) ended higher. The Pound Sterling is trading little changed at the 1.32 handle today. The Euro is also trading ranged vis-à-vis the US Dollar, though post-Brexit losses continue to remain overarching for both currencies. In other news, Nigel Farage stepped down as leader of the right wing UK Independence Party today, citing that his aim in politics was only to get his country out of the EU. With prominent supporters of the 'leave' campaign stepping down, uncertainty continues to loom. The Dollar index is trading firm at ~95 levels, as US markets remain closed on account of a holiday. Meanwhile, the Japanese Yen is trading with a slight depreciation bias relative to the US Dollar as Bank of Japan's Tankan survey showed business confidence remained subdued in the second quarter. US Treasury markets are closed on account of a holiday. Commodity market developments Crude oil is trading higher today amid comments by Saudi energy minister that the oil market is heading toward a balance with prices expected to settle. Meanwhile, Nigerian oil facilities were attacked yet again on Sunday by a militant group, threatening the country's oil supply. In other news, US oil driller added 11 rigs last week, bringing the total oil count to 341 rigs. Gold continues to rally, hovering at around ~2 year highs. Investors are flocking to the precious metal owing to its safe haven appeal. The yellow metal is currently trading at USD 1351/oz.

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CA. Rajesh Desai

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