{LONGTERMINVESTORS} Fwd: Daily Market Report - July 28, 2016

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From: <research@icicibank.com>
Date: Thu, Jul 28, 2016 at 5:56 PM
Subject: Daily Market Report - July 28, 2016
To: stockdesai@gmail.com

Domestic market developments Indian equities ended in the green today following the approval of changes to the crucial GST Bill by the Union Cabinet yesterday. Gains were led by FMCG and realty companies. Trade also witnessed stock specific triggers as major companies (including Asian Paints) detailed their Q2 FY2017 corporate earnings today. Sensex and Nifty ended 0.7% and 0.6% higher respectively. Indian Rupee ended stronger vis-à-vis the US Dollar at 67.03 levels vs. yesterday's close of 67.15. Upbeat momentum in local bourses and softness in the greenback supported the domestic currency. Sentiment also remained up owing to the Cabinet amendment to the GST Bill. However, reported Dollar purchases by foreign banks and oil importers capped the upside for the Rupee. Indian Government bonds ended higher as strength in the domestic currency, decline in crude prices and overnight fall in US Treasury yield lent positive cues to gilts today. The 10Y benchmark yield ended at 7.19% vs. yesterday's close of 7.25%. RBI injected liquidity to the tune of INR 63.36 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of July 27th. It injected INR 19.04 bn and 0.1 bn under Special Refinance Facility and Marginal Standing Facility respectively. Global Market Snapshot *Weighted Average (WAR) over the day Global market developments Asian equities ended largely in the red today ahead of BoJ policy meeting tomorrow. Reports indicating that China Banking Regulatory Commission is drafting norms for risky wealth management products weighed on Chinese indices. Nikkei (-1.1%), Hang Seng (-0.2%) and Kospi (-0.2%) ended down. However, Australia's ASX (0.3%) and Shanghai Composite (0.1%) settled higher. The Japanese currency is trading stronger, correcting most of its losses from yesterday. Bank of Japan's policy decision tomorrow will provide crucial cues to the markets. Although markets widely expect further stimulus measures, a move to maintain status-quo by the Central Bank may strengthen the Yen further. The Euro is also trading with an appreciation bias vis-à-vis the US Dollar amid losses in the latter. Going ahead, data releases from the Euro-area including June's unemployment rate, July's CPI and Q2 2016 GDP, due tomorrow, will remain crucial. Further, European Banking Authority's (EBA) stress test results for European Banks, due tomorrow, will shed crucial light on Italy's stressed banking sector. Meanwhile, the Pound is trading weaker, retreating to ~1.31 levels today. The greenback is also trading weaker, retracing to ~96 level handle today. US Treasuries are trading little changed today, though holding on to the bulk of its overnight gains. The 10Y benchmark yield is presently at 1.51% vs. the prior close of 1.50%. Commodity market developments Crude oil continues to trade lower, trimming slight early morning gains. Recent EIA weekly report indicating a rise in US oil stockpiles by 1.7 million barrel (vs. expectations of a decline) weighed on the commodity. WTI and Brent are trading at USD 42/bbl and USD 43/bbl respectively. Gold is trading higher today, extending overnight gains. The bullion surged 1.5% post the FOMC policy decision that resulted in weakness in the Dollar index.  The yellow metal is currently trading at USD 1342/oz. Regards, ICICI Bank Contact: Sonal Surana (+91-22) 2653-1414 (extn: 7243) sonal.surana@icicibank.com ​

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CA. Rajesh Desai

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