{LONGTERMINVESTORS} Fwd: Morning Market Starter - November 16, 2016

---------- Forwarded message ----------
From: <research@icicibank.com>
Date: Wed, Nov 16, 2016 at 11:01 AM
Subject: Morning Market Starter - November 16, 2016
To: stockdesai@gmail.com

On the radar: Winter Session of the Indian Parliament commences today. Central Bank Watch: China Premier Li Keqiang said, at a seminar in Beijing, that he is confident China will achieve its major full-year targets. The Government's full-year growth target currently stands at 6.5% to 7%. Chart: Indian 10Y yield has fallen sharply amid improved liquidity (on the back of demonitisation) and  inflation Source: Bloomberg, ICICI Bank Research Global market developments: Macroeconomic data o US: Retail sales grew 0.8% MoM in October, higher than the expected 0.6% MoM (prior: 1.0% MoM). o EZ: Q3 2016 GDP growth (second reading) was confirmed at its advance estimate print of 0.3% QoQ (Q2 print: 0.3% QoQ). o UK: CPI inflation edged lower to 0.9% YoY in October vs. 1.0% YoY earlier. Core inflation displayed a similar trend, falling to 1.2% YoY from 1.5% YoY. Oil prices gained ~5.7% yesterday amid news that Russia will hold informal talks with representatives of some OPEC countries in Doha on November 17th-18th. US equities closed in the green yesterday. Gains were led by oil and technology stocks. Dow Jones and S&P 500 ended up 0.3% and 0.8% respectively. Asian stocks are trading largely in the green this morning, tracking cues from US markets. Global turmoil following Donald Trump's victory has moderated slightly and is aiding risk appetite. Gains in the region are being led by Nikkei (+1.2%) and Kospi (+0.7%). Following suit, Hang Seng and Australia's ASX are up 0.6% and 0.2% respectively. Shanghai Composite is trading largely flat. US Treasuries are trading little changed this morning. Increasing expectation of a December Fed rate move and higher inflation prospects in the US (stemming from President-elect Trump's policies) has pushed yields up recently. The 10Y benchmark yield is currently at 2.22% similar to yesterday's close. Global market snapshot Domestic market developments: India's WPI inflation came in at 3.39% YoY in October vs. 3.57% YoY earlier (market consensus: 3.74% YoY). Primary food inflation moderated to 4.3% (prior: 5.8% YoY) with pulses inflation and vegetables seeing some cooling. Meanwhile, fuel WPI inflation edged higher. CPI inflation edges slightly lower to 4.2% YoY in October from 4.39% YoY (revised) earlier (ICICI Bank expectation: 4.1% YoY). Core inflation came in unchanged at 4.9% YoY. India's trade deficit widened to USD 10.16 bn in October from USD 8.34 bn earlier. Exports grew 9.6% YoY vs. 4.6% YoY previously. Meanwhile, imports surged as well, rising 8.1% YoY as compared to (-) 2.5% YoY previously. IOC cut petrol price by INR 1.46 per ltr and reduced diesel price by INR 1.53 per ltr yesterday. Indian Rupee is trading stronger against the Dollar at 67.69 levels (prior: 67.74). Indian Government bonds are trading sharply higher this morning, with the 10Y benchmark hovering at 6.41% levels. Regards, ICICI Bank Contact: Kamalika Das (+91-22) 2653-1414 (extn: 6280) kamalika.das@icicibank.com Niharika Tripathi (+91-22) 2653-1414 (extn: 6943) niharika.tripathi@icicibank.com S ​

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CA. Rajesh Desai

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