by Vembu Aug 2, 2012 08:37 IST
Hong Kong: Another listless start to the trading day, with investors playing it cautiously after the US Fed failed to signal any form of monetary stimulus for now.
As at 7.30 am IST, Nifty futures are trading flat, after yesterday's range-bound trading. But if the market is looking for direction, it could come in the form of reports that the Finance Ministry, under P Chidambaram, is close to ironing out a deal with Vodafone on the retrospective taxation issue that has dampened investor sentiment.
Elsewhere across the Asia-Pacific region, indices are fairly mixed, but except in Tokyo, the mood is slightly downbeat, since the booster dose from the Fed didn't come about overnight - and the European Central Bank too might disappoint at today's meeting.
After the Fed failed to indicate further stimulus, as was widely expected, the US dollar strengthened overnight, but Wall Street slid back to finish marginally down. But given the anaemic state of the US economy, analysts reckon it's just a matter of time before the Fed steps in.
The ECB Governing Council is to meet today, but here too analysts expect the markets to be in for a bit of a disappointment if the central bank doesn't put its money where its mouth is.
Back home, markets appear to have digested Chidambaram's first day in the Finance Ministry without any palpable sense of excitement, but if reports of a Vodafone tax deal are confirmed, we could see some positive triggers today. According to preliminary reports, the Finance Ministry has agreed to waive the back-tax penalty and interest, which was one of the sticking points that had had dampened investor sentiment.
If that comes through, it could mean that Chidambaram has started his new innings at FinMin with a bang. We could then witness a resurgence in investor sentiment, particularly from foreign institutional investors.
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