{LONGTERMINVESTORS} Fwd: Daily Market Report - August 31, 2016

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From: <research@icicibank.com>
Date: Wed, Aug 31, 2016 at 6:20 PM
Subject: Daily Market Report - August 31, 2016
To: stockdesai@gmail.com

Key developments today As per our expectations, India's Q1 FY17 GVA growth came in at 7.3% YoY (prior print: 7.4% YoY). GDP growth declined to 7.1% YoY from 7.9% YoY previously. India Apr-July fiscal gap stood at 73.7% of the FY2017 budget estimate of INR 5.339 tn vs. 69.3% in the corresponding period, last year. India's July eight core industries' growth came in at 3.2% vs. the earlier month's print of 5.2%. Domestic market developments Indian equities ended in the green today, shrugging off cues from their US counterparts, with financial shares leading the gains. On the data front, India's July fiscal deficit print (released post market hours) narrowed to INR 672 bn from INR 984 bn previously. Nifty ended higher by 0.4% and 0.5% respectively. Indian Rupee ended slightly stronger vis-à-vis the US Dollar, closing at 66.96 levels vs. the previous close of 67.02. Reported Dollar sales by foreign banks and performance of local bourses supported the Rupee intraday. However, Dollar purchases by state-owned banks capped the upside. Indian Government bonds ended little changed today amid lack of fresh triggers. Markets are likely to exercise caution ahead of the auction of four dated securities worth INR 140 bn on Friday. The 10Y benchmark yield ended at 7.11%, same as the previous close. RBI withdrew liquidity to the tune of INR 370.70 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of August 30th. It injected INR 17.95 bn and INR 2.25 bn under Special Refinance Facility and Marginal Standing Facility. Global Market Snapshot *Weighted Average (WAR) over the day Global market developments Asian equities ended mixed today with Japanese shares posting gains amid a weaker Yen. However, Japan's downbeat July industrial production capped gains. Hang Seng (-0.2%), Australia's ASX (-0.8%) and Kospi (-0.3%) closed lower. Meanwhile, Nikkei (+1.0%) Shanghai Composite (+0.4) ended higher. The Dollar Index held on to the gains that followed recent hawkish comments from Fed officials. Going ahead, US jobs data print, due on Friday, will take centre stage. The Pound is also trading stronger vis-à-vis the US Dollar today. Slight improvement in GfK consumer confidence data print, though still in the negative territory, is aiding the greenback. In other news, UK PM Theresa May held a meeting with top officials at Chequers today to discuss the approach to leave the EU. She affirmed her commitment to Brexit, stating that there will be no attempts to stay in the EU "by the back door". Meanwhile, the Japanese Yen is trading with a depreciation bias against the greenback today. Presently, the currency is hovering at the 103 handle in light of the recent gains in the greenback. The Euro is trading flat today. Going ahead, the 11th G20 summit in Hangzhou, China on 4-5th September will be closely tracked. US Treasuries are trading little changed amid caution ahead of Friday's NFP data from the US. Commodity market developments Crude is further extending losses today on account of overarching gains in the greenback. Weekly US inventory data by the EIA, due later today, will now be closely followed by investors. Gold is trading higher today, after posting losses to the tune of 0.9% yesterday. Meanwhile, holding of SPDR Gold Trust edged lower in August by 2.7 tonnes as compared to an inflow of 8 tonnes in July. 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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