{LONGTERMINVESTORS} Fwd: Daily Market Report - September 1, 2016

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From: <research@icicibank.com>
Date: Thu, Sep 1, 2016 at 5:23 PM
Subject: Daily Market Report - September 1, 2016
To: stockdesai@gmail.com

Domestic market developments Indian equities ended marginally in the red today as softness in Q1 FY17 GDP print weighed on market sentiment. Nifty and Sensex ended lower by 0.1%. Indian Rupee ended little changed vis-à-vis the US Dollar, closing at 66.95 levels vs. the previous close of 66.96. While lower finish in local bourses weighed on the domestic currency, a weaker greenback lent support. Moreover, the market witnessed Dollar demand by state-owned banks, which was matched by Dollar sales by foreign banks for foreign funds, thereby having little effect on the currency. Indian Government bonds ended little changed today as markets exercised caution ahead of the auction of four dated securities worth INR 140 bn and the release of US jobs report, due tomorrow. Traders also refrained from building significant positions ahead of the long-weekend ahead. The 10Y benchmark yield ended at 7.12% vs. the previous close of 7.11%. 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 31st. It injected INR 16.25 bn and INR 0.12 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 mixed today as sharp overnight decline in crude prices weighed on market sentiment. On the data front, Australia's AiG performance of manufacturing index slipped into the contractionary zone, keeping the markets under pressure. Meanwhile, a higher than expected manufacturing PMI data from China capped the downside.  Weakness in the Yen, however, aided markets in Japan. Australia's ASX (-0.3%), Shanghai Composite (-0.7%) and Kospi (-0.1%) settled lower. However, Nikkei (0.2%) and Hang Seng (0.8%) ended higher. The Dollar Index is trading under pressure as markets keenly await tomorrow's nonfarm payrolls data for August, which is expected to give investors insight into the possible timing of the next rate hike. The Euro is trading weaker vis-à-vis the US Dollar. On the data front, Eurozone's manufacturing PMI edged down slightly to 51.7 from 51.8 levels previously. Meanwhile, the Pound Sterling is trading stronger relative to the US Dollar on account of the upbeat data from the UK. Manufacturing PMI in August entered the expansionary territory, coming in at a 10-month high of 53.3 vs. 48.3 levels previously The Japanese Yen is trading with a slight depreciation bias against the greenback today as Japan's manufacturing PMI in August came in lower. US Treasuries are trading lower today. Friday's job market data from the US will be closely eyed by the markets. The 10Y benchmark yield is currently trading at 1.60% vs. the previous close of 1.58%. Commodity market developments Crude is trading lower today on account of a build-up in US crude inventories by 2.3 million barrels as indicated by US Energy Information Administration (EIA) data. WTI and Brent are currently trading at USD 45/bbl and USD 47/bbl respectively. Gold is trading lower today as markets remain cautious ahead of the crucial nonfarm payrolls print, due tomorrow. However, weakness in the US Dollar is capping losses. 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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