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Hong Kong: Bad news out of Europe overnight, with rating agency Standard & Poor’s lowering Spain’s sovereign rating by two notches, is weighing on investor sentiment across Asian markets this morning.
As at 7.30 am IST, indices across the region are looking fairly mixed: Tokyo, Sydney and Shanghai are all flat in some fairly volatile early trades, but Hong Kong is holding up fairly well.
Reuters
Overnight, Wall Street had a good day, on the back of some encouraging home sales data and robust corporate earnings. All three major indices finished up. But after close of trading on Wall Street came news of S&P’s downgrade of Spain ratings, citing mounting risks to government debt and a shrinking economy. As a consequence, Wall Street futures fell sharply. US GDP data is due out on Friday, but ahead of that concerns over eurozone are top of the mind.
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Nifty futures too began the day to the upside, but in early trades, they have been drifting down. They’re still ahead of the game, but the underlying sentiment looks weak.
Back home, markets have digested the S&P’s lowering of its outlook on India’s rating, and haven’t taken it too badly. But analysts are looking ahead to May with some trepidation.
Foreign institutional investors remain prickly about the new tax proposals and about the general policy uncertainty. The government appears to have got the message and is talking about loosening some of the more rigorous provisions. A feeble attempt is also under way to get going on policy initiatives as well.
For today, however, we’ll likely see a tentative start, given the lacklustre cues from overseas markets, and the overhang of bad news from Europe.
