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Equity Market
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Indian equities snap 3-session winning streak on profit booking: The primary laggards in today's session were consumer goods, banking and automobile shares.
However, the encouraging Q2 FY2014 current account deficit data, released post-market hours yesterday, kept sentiment supported. Meanwhile, the Cabinet today reportedly reviewed divestment plans in Coal India, BHEL and Hindustan Zinc Ltd. and has asked the concerned PSUs to suggest various options for raising the divestment proceeds. The Sensex ended lower at 20,854.92 (-0.21%) and Nifty closed at 6,201.85 (-0.26%).
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The BSE Bankex ended at 12,806.28 (-0.56%). SBI closed at INR 1,814.35 (-0.46%) and ICICI Bank ended at INR 1,086.10 (-0.26%).
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Asian peers end mostly in the red; Nikkei surges to 6-year closing high on Yen weakness: Kospi led the region's losses, ending lower by 1.05% on the back of selling by foreign investors. Hang Seng and Australia's ASX closed lower by 0.53% and 0.44% respectively. Nikkei, however, ended at a 6-year closing high, up by 0.60% buoyed by gains in exporters' stocks after the Yen slumped to a 6-month low intraday.
Shanghai Composite reversed intraday losses to end higher by 0.60%, aided by gains in pharma stocks.
Debt Market
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Bonds end slightly weaker amidst overnight losses in US Treasuries: Some intraday weakness in Rupee also added to the losses. The yield on the 7.16% bond due 2023 ended the session at 9.07% as against yesterday's close of 9.05%. Further, the yield on the 8.83% bond due 2023 ended the session at 8.76% as against yesterday's close of 8.74%.
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India's call rate closed at 6.78% as against yesterday's close of 6.75%. The RBI injected INR 549.66 bn (net), INR 9.26 bn and INR 242.33 bn under LAF (including 14-day term repo), MSF and Special Refinance facility respectively yesterday.
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US Treasuries remained unchanged; holding on to yesterday's losses: Currently, the 10-year benchmark yield is hovering around 2.79%, holding on to rise of 5 bps yesterday as better than anticipated manufacturing print from US aided prospects of earlier than previously expected reduction in asset purchase program by the Fed. (17:15 IST)
Forex Market
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Rupee ends slightly weaker on Dollar demand from PSU banks: Dollar demand from state-owned banks, reportedly on behalf of oil importers, coupled with broad-based strength in the greenback, kept the Rupee under pressure. USDINR ended the session at 62.35 vs. prior close of 62.31.
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The 6 and 12-month forward premia closed at 8.19% and 7.82% respectively, vs. yesterday's close of 8.30% and 7.86%.
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Pound extends gains amidst signs of recovery in the construction sector; Yen recovers from 6-month low amidst losses in global equities: The Pound Sterling is trading at 1.6411 vs. prior close of 1.6356 after UK's November construction PMI rose more than expected to 62.6- the highest reading since August 2007. The Yen, meanwhile, is hovering around 102.66 vs. prior close of 102.94, having recovered from the 6-month low of 103.38 hit intraday, aided by safe-haven demand amidst losses in global equities and the return of QE-tapering fears.
The Euro is trading higher around 1.3570 levels vs. yesterday's close of 1.3542. The US Dollar index is hovering around 80.78 vs. prior close of 80.93.
Commodities Market
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WTI trading higher on speculation of a reduction in US crude stockpiles: A weaker greenback is also supporting the prices. Currently, WTI is trading at USD 94.12/bbl as against yesterday's close of USD 93.82/bbl. However, Brent is trading flat around yesterday's close at USD 111.47/bbl amidst caution ahead of the OPEC meeting scheduled tomorrow. (17:15 IST)
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Gold prices slightly higher on value buying following a loss of 2.7% yesterday on upbeat US manufacturing print: The bullion also remained supported amidst weakness in Dollar. Spot gold is currently trading at USD 1,222.87/oz, as compared to yesterday's close of USD 1,219.83/oz. (17:15 IST)
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: 2285)
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