{LONGTERMINVESTORS} Fwd: Daily Market Report- November 17, 2016

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From: <research@icicibank.com>
Date: Thu, Nov 17, 2016 at 5:56 PM
Subject: Daily Market Report- November 17, 2016
To: stockdesai@gmail.com

On the radar: Fed Chair Janet Yellen's testimony to Joint Economic Committee due in some time. Further, markets await US CPI data for October (market exp: 1.6% YoY; prior: 1.5% YoY) Domestic market developments: Indian equities ended in the red today, dragged down by cement companies. Going ahead, change in global risk appetite and passage of key bills (such as the GST Bill) in the Winter Session of the Parliament will remain key. Nifty ended down 0.4%, while Sensex closed lower by 0.3%. Indian Government bonds were off intraday highs on profit sales, after earlier rise in prices. Caution ahead of the INR 150 bn debt sale on Friday also weighed on gilts. Nonetheless, improving liquidity after the Government's demonetisation programme kept market sentiment upbeat. The benchmark 10Y yield ended at 6.42% vs. yesterday's close of 6.44%. Indian Rupee strengthened against the Dollar as major private banks sold Dollars heavily on behalf of exporters. Mild dollar purchases by some PSU banks likely for oil importers may prevent the rupee from rising further. USDINR pair closed at 67.83 vs. yesterday's close of 67.94. RBI withdrew liquidity to the tune of INR 2,089.56 (net) under LAF (including fixed and variable rate repos and reverse repos), as of November 16th. It injected INR 8.75 bn and INR 14.56 bn under Marginal Standing Facility and Special Refinance Facility, respectively. Global Market Snapshot *Weighted Average (WAR) over the day Global market developments: Asian stocks ended mixed today, amid mixed cues from global markets. Global turmoil following Donald Trump's victory has moderated slightly and is aiding risk appetite. Gains were led by Australia's ASX (0.2%), Kospi (0.1%) and Shanghai Composite (0.1%), while the main loser was Hang Seng (-0.1%). Nikkei ended flat. The US Dollar weakened somewhat against major currencies today on caution ahead of US inflation data for October, and US Federal Reserve Chair Janet Yellen's testimony to the joint economic committee of the Congress, both due later today. Consequently, the Euro, Pound and Japanese Yen strengthened against the USD. Nonetheless, factoring in of substantial fiscal stimulus to the US economy under Donald Trump and rising interest rate expectations have kept the Dollar above 100 levels for the second day. US Treasury yields are trading in a narrow band today, as the BoJ's quantitative easing announcement stemmed the record global debt selloff to an extent. Increasing expectation of a December Fed rate move and higher inflation prospects in the US (due to President-elect Trump's policies) have pushed yields up recently. Additionally, China's holding of USTs declined to its lowest level in four years, as China utilized its reserves to support the Yuan. The 10-year benchmark yield is at 2.20% vs. yesterday's close of 2.22%. Commodity market developments: Crude oil prices inched up somewhat today as Saudi Arabia and some other OPEC nations (barring Iran and Iraq) geared up for informal talks with Russia tomorrow. WTI and Brent are currently trading at USD 45.7/bbl and USD 46.9/bbl, respectively. Gold is trading mildly higher today. Broad based strength in the greenback has continued to weigh on the yellow metal. Bullion is currently hovering at USD 1230/oz. Regards, ICICI Bank Contact: Sumedha Dasgupta (+91-22) 2653-1414 (extn: 7243) sumedha.dasgupta@icicibank.com ​

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CA. Rajesh Desai

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