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Equity Market
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Indian equities ended the day in red amidst caution ahead of the expiry of September futures and derivatives contracts tomorrow. Mixed cues from the global economy and uncertainty over Fed's stance on quantitative easing also weighed on sentiment.
Losses were led by blue-chip stocks, with Reliance Industries falling by 2.9% and ITC down by 1.2%. Oil marketing companies also incurred losses as Oil Minister Moily shied away from announcing hike in energy prices. HPCL (-3.3%), BPCL (-3.4%) and IOCL (-1.5%) were the prime losers. The Sensex ended at 19,856.24 (-0.32%) and Nifty closed at 5873.85 (-0.32%), recovering from intraday lows.
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The BSE Bankex ended lower at 11489.42 (-0.94%). SBI ended higher at INR 1,686.35 (+2.39%) while ICICI Bank ended down at INR 937.20 (-0.87%).
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Asian stocks ended mostly lower today as sentiment remained subdued amidst policy uncertainty in US. Renewed focus on the US debt ceiling issue, with the US Government likely to reach its borrowing limit by October 1st, weighed on equities.
Meanwhile continued speculation over Fed's QE stance also added to uncertainty. The Nikkei and the Kospi fell by 0.76% and 0.45% respectively. The Shanghai Composite declined by 0.41%, dragged down by losses in industrial companies and energy producers. However, the Hang Seng rose by 0.13%, led by raw materials producers. Australia's ASX rose 0.80% amidst value-buying.
Debt Market
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Indian Government bonds ended higher today, aided by value buying. However, gains were limited as auction of dated securities worth INR 140 bn scheduled on Friday kept sentiment guarded. Meanwhile, absence of any announcement of OMO purchase so far this week by the RBI also weighed on the bonds. The yield on the benchmark 7.16% bond due 2023 ended the day at 8.79% as against yesterday's close of 8.84%.
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India's call rate closed at 9.45%, as against yesterday's close of 9.50%. The RBI injected INR 404.67 bn (gross) into the banking system today as against INR 402.67 bn yesterday. Meanwhile, RBI injected INR 627.82 bn and INR 433.47 bn under MSF and Special Refinance facility respectively yesterday.
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US Treasuries are trading little changed today, holding on to most of yesterday's gains post the release of a four month low consumer confidence index print. Meanwhile, auction sales of 5-year debt worth USD 35 bn is scheduled today.
Going ahead, markets will closely watch new home sales prints due today for further cues on Fed's asset purchase program. The 10-year benchmark yield is currently trading around 2.65%, flat around yesterday's close. (17:30 IST)
Forex Market
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The Indian Rupee strengthened for the first time in four trading sessions amidst reported Dollar sales by foreign banks. Intraday recovery in domestic equities from the day's lows also supported the Rupee market. The USD/INR pair ended lower at 62.44, compared to yesterday's close of 62.75.
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The 6 and 12-month forward premia closed at 8.95% and 7.80% respectively compared to prior close of 8.69% and 7.59%.
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The US Dollar index is trading lower today amidst rising concerns that debate over budget in Washington might lead to Government shutdown. Further, markets will closely watch new home sales print due later today for further cues.
The British Pound is trading higher, aided by value buying as it had declined by 0.24% yesterday. Meanwhile, the Euro and the Japanese Yen are trading stronger. The Dollar index is currently at 80.40 compared to yesterday's close of 80.56. EUR/USD is hovering around 1.3509 vs. yesterday's close of 1.3474; GBP/USD is trading around 1.6046, vs. previous close of 1.6004. USD/JPY is trading around 98.54 compared to previous close of 98.75 (17:30 IST).
Commodities Market
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Crude oil prices are trading higher today on the back of a weaker greenback. Further, American Petroleum Institute reported yesterday that US crude stockpiles declined by 54,000 barrels, which gave support to the crude oil prices. Meanwhile, WTI prices also remained supported amidst some value buying following significant losses in last few trading sessions.
Going ahead, markets will closely watch US Energy Department's oil inventory data due today for further cues. The front-month WTI future is currently trading at USD 103.75/bbl, compared to USD 103.13/bbl yesterday. Brent is trading at USD 109.72/bbl, compared to yesterday's close of USD 108.64/bbl. (17:30 IST)
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Gold prices are trading little changed today as markets remained on the sidelines ahead of the third estimate of US Q2 GDP print due later tomorrow. Meanwhile, holdings in SPDR Gold Trust remained steady at 909.59 tonnes yesterday. Further, slight weakness in Dollar is likely to support the metal prices. Spot gold is currently trading at USD 1322.2/oz, as compared yesterday's close of USD 1323.3/oz. (17:30 IST)
Please find attached herewith a file containing the detailed version of the above news analysis.
Regards,
ICICI Bank : Treasury Research
Contact:
Tadit Kundu: +91 22 2653-1414 (extn: 2087)
Shanjukta Nath: +91 22 2653-1414 (extn: 2085)
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