{LONGTERMINVESTORS} Fwd: Morning Market Starter - August 4, 2016

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From: <research@icicibank.com>
Date: Thu, Aug 4, 2016 at 10:59 AM
Subject: Morning Market Starter - August 4, 2016
To: stockdesai@gmail.com

On the radar: Markets await Bank of England's policy and its latest Inflation Report, due later today. Key developments: The landmark Goods and Services Tax (GST) Constitutional Amendment Bill was passed in the Rajya Sabha yesterday. This paves the way for a simpler tax regime and unified common market. o Under the new tax regime, input tax credit would be available at each stage, which will help eliminate the issue of tax cascading. Central Bank watch: Chicago Fed President Charles Evans said that one rate increase would be "appropriate" this year. He also added that while real economy seems to be doing well in the US, he does not foresee inflation reaching Fed's target level of 2% before the end of 2018. Bank of Japan Deputy Governor Kikuo Iwata remarked that inflation in Japan is expected to accelerate again. He reiterated BoJ's stance that the Central Bank will not hesitate to add further stimulus, if required. Chart : US ADP employment data for July improved to 179K from the prior (revised) print of 176K Global market developments: Macroeconomic data: o US: ADP employment change data for July came in higher at 179K as against the prior (revised) print of 176K. Services PMI came in higher at 51.4 (prior print: 50.9). Meanwhile, ISM non-manufacturing composite index edged lower to 55.5 (prior print: 56.5). o EZ: Services PMI for July (final print) showed an improvement, coming in at 52.9 vs. the previous month's print of 52.7. Meanwhile, retail sales in June came in flat, in line with market expectations (prior reading: 0.4% MoM). US markets ended in the green yesterday. Market sentiment remained largely upbeat after the release of higher ADP employment change data and recovery in crude prices overnight. Going ahead, markets will closely track the crucial NFP data prints for the month of July, due tomorrow. Dow Jones and S&P ended 0.2% and 0.3% higher respectively. Asian equities are trading largely in the green this morning, in line with their US peers. Hang Seng (0.6%), Kospi (0.1%), Nikkei (0.4%) and Australia's ASX (0.4%) are trading higher. Meanwhile, Shanghai Composite (-0.3%) is posting losses. US Treasuries are trading ranged this morning as markets await the crucial NFP data prints, due tomorrow. The 10Y benchmark yield is currently trading at 1.55% vs. the previous close of 1.54%. Global market snapshot Domestic market developments: India's services PMI for the month of July came in higher at 51.9 as against the previous month's reading of 50.3. Indian Rupee is trading stronger against the US Dollar at 66.93 levels vs. the previous close of 66.99. Indian equities are trading in the green today. Nifty and Sensex trading 0.2% and 0.3% higher each. Indian Government bonds are trading higher with the 10Y benchmark yield at 7.17%, vs. the previous close of 7.20%. 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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