Hong Kong: The Indian market will likely open a trifle weaker this morning, in line with the sentiment across much of Asian markets and on Wall Street overnight.
Investor sentiment is lacking in verve although the US Fed decided overnight to extend Operation Twist, the monetary stimulus intended to keep long-term interest rates low. But Ben Bernanke offered a downbeat assessment of the US economy, and because markets had been expecting something more extravagant – perhaps in the form of anther round of Quantitative Easing – they’ve responded negatively to the extension of the Twist.
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It just goes to show that these moves by the US Fed, evidently intended to prop up the US economy and buck up the markets, are progressively having less of an impact. In other words, the Fed is only firing blanks, but what else can it do when it’s run out ammunition?
Overnight, Wall Street saw some sickly volatile trading, as sentiment towards Europe see-sawed. Centre-right political parties in Greece formed a new government and said they would work to avert an exit from the eurozone, but they have a hard grind – and an impossible task – ahead of them.
That negative sentiment has spilled over into most of the Asian markets this morning, particularly after manufacturing data out of China confirmed the slowdown there. Tokyo is the only market that’s up; most other indices are down, even if not by much.
As at 7.30 am IST, Nifty futures are trading down nearly four-tenths of 1 percent, which points to a tepid start to trade today. The Empowered Group of Ministers is to meet today to finalise telecom spectrum policy, which is about the only trigger for the markets today.