Daily Market Report - December 13, 2013

[Rajesh Desai]

Domestic markets wrap-up Key Developments Today Higher than expected November CPI inflation print released yesterday added to bets that the RBI might raise rates in its policy meeting next week. Markets now await November WPI inflation print due on Monday. Indian equities fell amidst caution ahead of RBI policy next week. Rate-sensitive banking and real-estate stocks were the major laggards. Rupee ends lower tracking losses in domestic equities: Continued strength in the US Dollar amidst rising bets over possible early QE-tapering also weighed on Rupee. USDINR closed at 62.12 vs. yesterday's close of 61.83. Bonds end lower amidst speculation of a repo rate hike next week: Intraday weakness in Rupee also weighed on bonds. The cut-off yield in 14-day term repo auction (worth INR 485 bn) came in at 8.01% today. Global Market Developments Asian stocks end mixed: Shanghai Composite fell by 0.3% amidst caution ahead of Government's growth targets due to be announced next week. Nikkei rose by 0.4% amidst a weaker Yen. The US Dollar rose amidst QE-tapering concerns: The Yen weakened to its lowest levels in five years vs. the Dollar amidst contrasting outlook over Central Bank stance in the two economies. Markets look forward to FOMC meeting next week. US Treasuries slightly weaker, holding on to yesterday's losses amidst upbeat retail sales print: The bid-to-cover ratio in yesterday's auction of 30-year notes came in at 2.16, lowest since August 2013. Commodities Market Developments Crude oil prices lower on the back of a stronger Dollar: Brent remained under pressure as Libya is scheduled to resume operation of its eastern oil-export terminals later this week. Gold prices marginally higher on value buying following a loss of 2% yesterday: Holdings in SPDR Gold Trust declined by 6 tonnes yesterday to 827.6 tonnes which weighed on the bullion. Please find attached herewith a file containing the detailed version of the above news analysis. Regards, ICICI Bank : Treasury Research Contact: Shanjukta Nath: +91 22 2653-1414 (extn: 2285) Tadit Kundu: +91 22 2653-1414 (extn: 2087)

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CA. Rajesh Desai