{LONGTERMINVESTORS} Fwd: Morning Market Starter- July 5, 2016

---------- Forwarded message ----------
From: <research@icicibank.com>
Date: Tue, Jul 5, 2016 at 11:05 AM
Subject: Morning Market Starter- July 5, 2016
To: stockdesai@gmail.com

Key developments today: Reserve Bank of Australia (RBA) maintains status-quo in its policy decision today and leaves its cash rate target unchanged at 1.75%. IMF Chief Christine Lagarde reportedly commented that Britain's exit could reduce the country's GDP by about 1.5-4.5% by 2019. S&P cut GDP forecast by 0.8% over 2017 and 2018 for the Euro-area on consequences of Brexit. Further, UK's GDP growth was estimated to drop by 1.2% and 1.0% by 2017 and 2018 respectively. The rating agency also said that UK will just about escape a "full-fledged" recession, though large downside risks remain predominant. Chart: Japan's services PMI slipped into the contractionary zone to 49.4 from 50.4 previously Global market developments: Macroeconomic Data: o CA: Manufacturing PMI in June came in lower at 51.8 from the prior levels of 52.1. o AU: AiG performance of services in June was slightly lower, coming in at 51.3 (prior print: 51.5). Trade deficit for May widened to AUD 2.2 bn as against the earlier (revised) print of 1.8 bn. Retail sales in May rose to 0.2% MoM (prior revised print: 0.1% MoM). o CN: Services PMI in June showed an uptick, coming in at 52.7 (prior print: 51.2). o JN: Services PMI in June slipped into the contractionary territory (below 50 levels), coming in at 49.4 as compared to the earlier reading of 50.4. US markets were closed yesterday on account of a holiday. Asian equities are trading largely in the red this morning amid negative cues from European markets yesterday as Brexit concerns take centre stage again. Comments from IMF Chief and the resignation of UKIP leader Nigel Farage, a prominent 'leave' campaigner fuelled Brexit uncertainty once again in global markets. Further, downbeat services PMI from Japan are weighing on stocks. Rise in China's PMI are aiding Chinese markets today. Nikkei (-0.9%), Hang Seng (-0.8%), Kospi (-0.4%) and Australia's ASX (-1.0%) are posting losses. Meanwhile,Shanghai Composite (0.6%) is trading higher. US Treasuries are trading higher this morning. Overnight, yields rise on account of some rebound in risk-appetite as Brexit concern seemed to fade on Friday. However, yields are retracing on account of resurfacing of uncertainty in global markets. The 10Y benchmark index is trading at 1.41% as against Friday's close of 1.44%. Global market snapshot Domestic market developments: Indian Rupee is slightly weaker vis-à-vis the US Dollar at 67.38 levels as against yesterday's close of 67.27. Indian equities are trading slightly lower today with the Nifty and Sensex down 0.1% each. Indian Government bonds are trading flat today with the 10Y benchmark yield presently at 7.42%, same as the previous close. 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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