Morning Market Starter- February 3, 2014

[Rajesh Desai]

 

On the radar: China's official manufacturing PMI for January fell to a 6-month low of 50.5 as against prior print of 51.0. Meanwhile, China's non-manufacturing PMI also declined to 53.4 vs. 54.6 in December. Global Market Developments: US benchmark equity indices ended in the red on Friday, amidst weak earnings results from companies like Amazon.com and Mattel Inc. Dow Jones ended down by 0.94% and S&P 500 declined by 0.65%. Asian stocks are trading lower today morning, tracking negative cues from Wall Street. Sentiment is also weak this morning after China's official manufacturing PMI for January dropped to a 6-month low. Japan's Nikkei is down by 1.2%. Kospi is down by 1.1%, weighed by losses in technology shares and Australia's ASX is down 0.2%. Markets in China and Hong Kong are closed on account of holiday. US Treasuries are trading slightly weaker today morning, albeit holding on to most of Friday's gains. In Friday's session the 10-year benchmark yield had declined by almost 6 bps to end the session at 2.64% as weak sentiment in emerging markets aided safe-haven demand. The 10-year yield is currently hovering around 2.66%. Domestic Market Developments: India's April-December fiscal gap came in at INR 5.16 tn, exceeding 95% of the FY2014 target of INR 5.43 tn. India's FY13 GDP growth was revised down to 4.5% YoY from prior estimate of 5.0%. India's December core industries growth came in at 2.1% YoY as against prior month's reading of 1.7%. Diesel prices were hiked by 50 paise per litre on Friday. 8.83% Indian equities are trading in the red this morning, amidst weak cues from Asian peers 8.83% Please find detailed currency views in the attached document. Regards, ICICI Bank Contact: Sunandan Chaudhuri (+91-22) 4008-7525

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CA. Rajesh Desai