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Domestic market developments
- Indian equities were one of the only major Asian equities to have ended in the red today. Around mid-day today, the Indian Army and the Government announced in a joint press conference about surgical strikes having been conducted across the LoC last night to annihilate terrorists. Following this, Indian stocks plunged heavily amid geopolitical tensions between India and Pakistan. Both the Nifty and the Sensex closed 1.8% and 1.6% down, respectively, in intraday trade.
- Indian Rupee showed volatility against the Dollar today, ending the day at 66.85. Intraday, the domestic currency plunged to 66.91, following the aforementioned political confrontations.
- Indian Government bond surged 8 bps to close at a yield of 6.86% as against the previous close of 6.78%, amid negative cues after India conducted surgical strikes against Pakistan last night. Going ahead, markets will look for cues from the RBI policy meeting, scheduled for next week, as well as any resumption of geopolitical tensions.
- RBI withdrew liquidity to the tune of INR 34.20 bn (net) under LAF (including fixed and variable rate repos and reverse repos), as of September 28th. It also injected INR 10 bn and INR 17.03 bn under Marginal Standing Facility and Special Refinance Facility, respectively.
Global Market Snapshot | | 
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Global market developments
- Asian equity indices ended largely in the green today, owing to gains by energy companies in the fallout of the preliminary OPEC consensus to cut output. Gains in the region were led by Nikkei (1.4%), Australia ASX (1.1%), Kospi (0.8%), Hang Seng (0.5%) and Shanghai Composite (0.4%).
- The US Dollar index is trading slightly higher today, albeit holding onto its recent range, shrugging off the slightly hawkish comments from various Fed speakers made in past 24hrs. The Japanese Yen was the top most underperformer, falling by almost 0.8% to 101.50 levels vis-à-vis US Dollar due to positive risk sentiment after OPEC agreed to cut production. The Euro is trading broadly flat, ignoring the positive inflation data from German States and positive economic sentiment index for Eurozone. Preliminary data from six German states showed that annual inflation had clearly accelerated in September, possibly reaching its highest level in 16 months. Eurozone economic sentiment index rose to 104.9 in September from 103.5 in August. The Australian Dollar is trading slightly lower, probably due to profit booking by market participants, after making a 3-week high of 0.7710 against US Dollar post OPEC deal.
- US Treasuries are trading lower today, currently at 1.58%, as compared to yesterday's close of 1.57%. Treasuries also saw an intraday decline to 1.59%, as the preliminary OPEC deal on output sapped demand for safe securities.
Commodity market developments
- Brent crude is trading flat today at USD 47/barrel, holdingon to the gains made post OPEC deal.
- Gold is trading broadly flat today at USD 1321 / oz, albeit holding onto yesterday's fall made post hawkish comments from various Fed speakers and positive risk sentiment.
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| Regards,
ICICI Bank
Contact:
Pradeep Goyal
(+91-22) 2653-1414 (extn: 6229)
goyal.pradeep@icicibank.com
Sumedha Dasgupta
(+91-22) 2653-1414 (extn: 7243)
sumedha.dasgupta@icicibank.com
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--
CA. Rajesh Desai
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