{LONGTERMINVESTORS} Fwd: Daily Market Report- September 26, 2016

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From: <research@icicibank.com>
Date: Mon, Sep 26, 2016 at 5:36 PM
Subject: Daily Market Report- September 26, 2016
To: stockdesai@gmail.com

Domestic market developments Indian equities ended today's session in the red. Weakness in global financial markets weighed on the indices ahead of the first US Presidential debate (due tomorrow). Going ahead, on the domestic front, markets will turn to RBI's October policy meet for further cues. Nifty and Sensex ended down 1.2% and 1.3% respectively. Indian Rupee pared early morning losses to end marginally stronger vis-à-vis the Dollar. Reported Dollar sales by foreign banks aided the currency. However, weakness in global risk appetite weighed on Rupee.  USDINR pair closed at 66.60 levels vs. yesterday's close of 66.65. Indian Government bonds ended largely flat today with the new 10Y yield closing just shy of the 6.80% mark. Sentiment continued to remain supported amid reports of RBI Governor Urjit Patel downplaying inflation risks and on expectation of OMO announcement. However, profit booking capped the upside. RBI withdrew liquidity to the tune of INR 87.54 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of September 23rd. It injected INR 15.32 bn under Special Refinance Facility. Marginal Standing Facility (MSF) was unutilised. Global Market Snapshot *Weighted Average (WAR) over the day Global market developments Asian equity indices ended largely in the red today. Shanghai Composite (-1.8%), Hang Seng (-1.6%), Nikkei (-1.3%) and Kospi (-0.3%) were the major losers. Markets in China slumped as volatility returned ahead of the week long holiday starting next week, while a stronger Yen impinged on the performance of Japanese stocks. Commodity shares also weighed on the indices. However, Australian ASX was the only aberration, ending flat today. The US Dollar index is trading slightly lower today, partly due to falling US yields. Both Euro and Japanese Yen have been an outperformer today, albeit holding onto their recent range. Euro is trading higher as German IFO expectation for September rose to 104.5 vs. expected 100.2. Japanese Yen has been trading higher at 100.40 vis-à-vis US Dollar, shrugging off the comments wherein Governor Kurado said that the central bank stands ready touse all tools necessary to get inflation back to its 2% target, including cutting interest rates further into negative territory. Additionally, the comments from ex-MoF official Eisuke Sakakibara were also gaining traction. He said that USDJPY levels between 95-100 is okay for the Japanese economy, and Yen will probably slowly gain to 90 in 2017. On the other hand, Sterling continued on its recent downward trend, trading at ~1.2930 levels via-a-vis US Dollar. US Treasuries are trading higher today. The US 10Y yield is currently trading at 1.60%, as compared to yesterday's close of 1.62%. Commodity market developments Crude is trading higher today as Algeria's energy minister indicated earlier that Saudi Arabia has offered to cut its output to January levels. However, the oil minister for UAE said that an oil supply freeze would be the maximum outcome to be expected from the OPEC-Russia meet, which commenced today at Algeria, while production cuts are not up for discussion. WTI is trading at USD 45.0/bbl currently, while Brent is trading at USD 46.6/bbl. Gold is trading ranged today at USD 1338/oz, after posting gains for six consecutive days, following the expected status quo rate action by the Federal Reserve last week. Regards, ICICI Bank Contact: Niharika Tripathi (+91-22) 2653-1414 (extn: 6943) niharika.tripathi@icicibank.com Pradeep Goyal (+91-22) 2653-1414 (extn: 6229) goyal.pradeep@icicibank.com Sumedha Dasgupta (+91-22) 2653-1414 sumedha.dasgupta@icicibank.com ​

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CA. Rajesh Desai

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