{LONGTERMINVESTORS} Fwd: Morning Market Starter - September 30, 2016

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From: <research@icicibank.com>
Date: Fri, Sep 30, 2016 at 10:35 AM
Subject: Morning Market Starter - September 30, 2016
To: stockdesai@gmail.com

Central Bank watch: US Philadelphia Fed President Patrick Harker advocated, in a speech yesterday, the case for raising interest rates to get ahead of inflation and avoid "falling behind the curve". ECB Governing Council member Bostjan Jazbec stated yesterday that it is "definitely too early" for ECB to consider buying shares as part of its non-standard policy measures. Chart: US Q2 GDP was revised upward in its final reading Global market developments: Macroeconomic data o US: Q2 2016 GDP print was revised up to 1.4% QoQ (ann.) in its final reading from 1.1% QoQ (ann.), beating market estimates. US economic growth was less sluggish than previously thought in the second quarter as exports grew more than imports and businesses raised their investments, hopeful signs for the economic outlook. o JN: August CPI inflation edged further into deflation at (-)0.5% YoY vs. (-) 0.4% previously. Core inflation came in 0.2% YoY vs. 0.3% YoY earlier. Meanwhile, industrial production grew at 1.5% MoM in August vs. prior contraction of (-)0.4% MoM. o CN: Caixin manufacturing PMI came in slightly higher at 50.1 in September as compared to 50.0 in August. Oil prices continued to trade higher yesterday, extending recent gains as OPEC agreed to cut production for the first time in eight years. Slight retracement is being seen this morning. WTI and Brent are currently hovering at USD 47.6/bbl and USD 48.9/bbl respectively. Concerns regarding the financial health of Germany's biggest lender is weighing on sentiment in financial markets. o US markets ended in the red yesterday amid lower risk appetite. Dow Jones and S&P ended lower by 1.1% and 0.9% respectively. o Asian equities are trading largely in the red this morning, tracking cues from US markets. Losses in the region are being led by Nikkei (-1.6%) and Hang Seng (-1.3%). Following suit, Kospi (-0.8%) and Australia's ASX (-0.8%) are trading in the red. Meanwhile, Shanghai Composite is up 0.1%. o Markets in China will remain closed next week on account of National day holidays. US Treasuries are trading higher this morning, after posting steep gains overnight. Treasuries advanced yesterday with the 10Y yield falling ~ 3 bps as weakness in financial markets spurred demand for safer US debt. The 10Y benchmark yield is currently hovering at 1.55% levels, as compared to yesterday's close of 1.56%. Global market snapshot Domestic market developments: RBI released its H2 FY2017 borrowing calendar yesterday. Total borrowing in H2 has been pegged at INR 2.45 tn. The government notified the Monetary Policy Committee (MPC) yesterday. EPFO raised yesterday the limit of investment in ETFs to 10% from 5% for 2016-17. Regards, ICICI Bank Contact: Samir Tripathi (+91-22) 2653-7233 samir.tripathi@icicibank.com Niharika Tripathi (+91-22) 2653-1414 (extn: 6943) niharika.tripathi@icicibank.com ​

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CA. Rajesh Desai

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