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Key developments today
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India's January HSBC manufacturing PMI posted its highest reading since March 2013, coming in at 51.4 vs. 50.7 in December
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The Central Government increased domestic gas supply from 80% to 100% in the city gas distribution (CGD) sector which is expected to reduce CNG and PNG (piped natural gas) prices by INR 15/kg and INR 5/cubic metre respectively in Delhi; other cities are likely to benefit as well
Domestic markets wrap-up
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Sensex ends at over two-month low amidst weak overseas cues. Meanwhile, corporate earnings results released today were mixed; While Lupin's results exceeded analysts' estimates, those of Gillette India and Vijaya Bank disappointed. Sensex ended lower by 1.5% and Nifty ended down by 1.4%.
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Rupee ends marginally stronger, tracking gains in the Euro. However, weak cues from domestic equities limited the upside. USDINR ended at 62.58 vs. prior close of 62.66.
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Gilts end slightly stronger, extending Friday's gains. Meanwhile, the recent decline in crude oil prices also aided the bonds. The 8.83% bond due 2023 ended the session at 8.73% vs. Friday's close of 8.77%.
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The RBI injected INR 1,000.85 bn (net), INR 88.25 bn and INR 401.16 bn under LAF (including 14-day and two 28-day term repos), MSF and special refinance facility respectively on Friday.
Global Market Developments
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Asian equity peers end lower as weak PMI data from China weighs on sentiment. Nikkei and Kospi fell by 2.0% and 1.1% respectively. Australia's ASX ended largely flat amidst caution ahead of the RBA policy meeting tomorrow. Meanwhile, markets in China and Hong Kong were closed on account of holiday.
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Euro trading higher, buoyed by positive manufacturing PMI data which improved to 54.0 in January as against the flash estimate of 53.9. The safe-haven Japanese Yen is also trading stronger amidst losses in global equities. The Pound is trading lower for the fifth session in a row, after manufacturing PMI for January came in lower than expectations at 56.7.
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US Treasuries are trading slightly weaker today on profit booking following significant gains on Friday. Markets would closely watch US ISM manufacturing data due today and NFP data due later this week for further cues. The 10-year benchmark yield is currently hovering at 2.66% vs. Friday's close of 2.64%.
Commodities Market Developments
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Crude oil prices are trading lower today, extending Friday's losses. Meanwhile, weak official PMI print from China released today morning weighed on the crude prices.
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Gold prices are trading marginally higher on the back of a weaker greenback. Holdings in SPDR Gold Trust remained unchanged at 793.16 tonnes on Friday.
Please find attached herewith a file containing the detailed version of the above news analysis.
Regards,
ICICI Bank : Treasury Research
Contact:
Pooja Sriram +91 22 2653-1414 (extn: 2195)
Shanjukta Nath+91 22 2653-1414 (extn: 2085)
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