{LONGTERMINVESTORS} Fwd: Daily Market Report - August 29, 2016

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From: <research@icicibank.com>
Date: Mon, Aug 29, 2016 at 5:51 PM
Subject: Daily Market Report - August 29, 2016
To: stockdesai@gmail.com

Domestic market developments Indian equities ended in the green today, shrugging off cues from their US counterparts. Indices pared intraday losses, with gains being led by auto and banking stocks. Markets now await India's Q2 2016 GDP and GVA prints along with fiscal deficit data for July, due Wednesday. Sensex and Nifty ended higher by 0.4% each. Indian Rupee ended weaker vis-à-vis the US Dollar, closing at 67.17 levels vs. the previous close of 67.06. Strength in the greenback post hawkish comments by Fed officials kept the Rupee under pressure. Dollar demand by importers weighed on the currency though Dollar sales by some private banks likely limited losses. Indian Government bonds ended little changed today. Expectations of new 10-year bond announcement aided gilts though steep rise in US Treasury yields and weakness in the Rupee post Yellen's speech on Friday capped the upside. The 10Y benchmark yield ended at 7.12% vs. the previous close of 7.13%. RBI withdrew liquidity to the tune of INR 412.26 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of August 26th. It injected INR 18.14 bn under Special Refinance Facility. Global Market Snapshot *Weighted Average (WAR) over the day Global market developments Asian equities ended mixed today after commentary by Fed officials including Chair Janet Yellen, pointing towards a rate hike as soon as next month. Japanese shares led the gains in the region on account of a relatively weaker Yen. In other news, Bank of Japan Governor Haruhiko Kuroda reiterated that the bank will provide more stimulus if needed. Hang Seng (-0.4%), Australia's ASX (-0.8%) and Kospi (-0.3%) closed lower. Nikkei (+2.3%) posted gains while Shanghai Composite ended flat. The Dollar Index is seen to extend recent gains amid increased expectations of a rate hike in 2016, anchored by commentary by Fed officials such as Fed Chair Janet Yellen and Vice-Chairman Stanley Fischer. Going ahead, US NFP data print for August, due on Friday, will remain critical. The upsurge in the greenback is weighing on most currencies today. The Pound Sterling declined to the 1.30 level handle today. In other news, reports suggest that UK's Prime Minister Theresa May is likely to hold a Cabinet meeting with her top ministers to reiterate her commitment to Brexit. This meeting is said to be held before the PM proceeds for the 11th G-20 summit in Hangzhou, China. The Euro is also extending losses that followed hawkish comments from Janet Yellen. Eurozone's inflation print for August, due on Wednesday, will remain crucial. The Japanese Yen is also trading with a depreciation bias against the greenback. A host of data prints from Japan (including consumer confidence and industrial production), on the line up for this week, will be closely tracked. US Treasuries are trading little changed, holding on to the steep losses that followed Janet Yellen's hawkish speech on Friday. US jobs data report, due on Friday, will now be turned to by the markets. The 10Y benchmark yield is currently trading at 1.62% as against the previous close of 1.63%. Commodity market developments Crude is trading with a bearish bias. Overarching strength in the US Dollar, recent comments by Iraq's oil Minister, hinting at further increase in the country's oil output and data showing Saudi Arabia producing at record high levels are keeping the commodity under significant pressure today. Gold is posting losses for the seventh session in a row today. Increased prospects of a rate hike this year and gains in the greenback as a result are weighing on the bullion. The yellow metal is presently at USD 1320/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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