{LONGTERMINVESTORS} Fwd: Daily Market Report - August 25, 2016

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From: <research@icicibank.com>
Date: Thu, Aug 25, 2016 at 5:20 PM
Subject: Daily Market Report - August 25, 2016
To: stockdesai@gmail.com

Domestic market developments Indian equities ended in the red today amid the weak global cues and the August F&O expiry. Investors await cues regarding the possible timing of the next Fed rate hike from Yellen's speech tomorrow. IT and banking stocks were the major laggards. Sensex and Nifty ended lower by 0.8% and 0.7% respectively. Indian Rupee ended stronger vis-à-vis the US Dollar, closing at 67.05 levels vs. yesterday's close of 67.11. Reported Dollar selling by exporters and foreign banks aided the domestic currency, though Dollar bids by importers capped the upside. The Rupee is expected to track movements in the US Dollar post Janet Yellen's speech tomorrow. Indian Government bonds ended higher today ahead of tomorrow's auction of four dated securities. Firm demand by traders and declining oil prices supported gilts. The 10Y benchmark yield ended at 7.12% vs. yesterday's close of 7.14%. RBI withdrew liquidity to the tune of INR 289.14 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of August 24th. It injected INR 19.06 bn and INR 4.00 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 as markets remained cautious ahead of Fed Chair Janet Yellen's speech at Jackson Hole tomorrow. Hang Seng and Kospi ended flat while Nikkei (-0.3%), Australia's ASX (-0.4%) and Shanghai Composite (-0.6%) closed lower. The Dollar index is trading weaker as the steeply lower existing home sales data trimmed recent gains for the index. All eyes now turn to Fed's symposium of Central Banks at Jackson Hole tomorrow for crucial cues on the timing of the Central Bank's next rate hike. The Pound is trading slightly weaker vis-à-vis the greenback. UK's Q2 2016 GDP print (preliminary estimate), expected tomorrow, is expected to provide further cues to the Sterling. Markets widely expect GDP to come in at 0.6% QoQ as against the previous quarter's print of 0.4% QoQ. On the other hand, the Euro is trading stronger relative to the US Dollar, trading only marginally shy of its ~1.13 handle. In other news, German Chancellor Angela Merkel highlighted the hard work that now lies before the EU to overcome repercussions of the Brexit vote, citing it as a "watershed moment" for the Union. Meanwhile, the Yen is trading ranged at the 100 level mark. Going ahead, Japan's inflation data print for July will provide crucial triggers tomorrow. US Treasuries are trading little changed as investors await the key event in Jackson Hole, the auction of USD 28 bn in seven-year notes and data releases for durable goods orders, initial jobless claims and secondary reading of Q2 2016 GDP. The 10Y benchmark yield is at 1.55% vs. yesterday's close of 1.56%. Commodity market developments Crude is trading slightly higher, albeit hovering at its week-long lows as oversupply concerns remain overarching. EIA weekly report showing a rise in US crude inventory by 2.5 million barrels, last week, is keeping prices largely under pressure. Gold remains flat today, mirroring a largely muted global market in anticipation of Janet Yellen's speech tomorrow. The yellow metal is presently trading at USD 1324/oz. 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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