Hong Kong: Markets looking for their dose of cheap-money fix are up this morning on hopes that the US Fed will deliver it – in one form or another.
As at 7.30 am, Nifty futures are up about two-tenths of 1 percent, building on yesterday’s gains. Elsewhere across the Asia-Pacific region too, most indices are up moderately. Shanghai, though, is the exception and is down a tick.
They’re taking their cues from Wall Street overnight, where all three leading indices ended up nearly 1 percent each after some robust housing data – and the hope that some form of monetary stimulus from the US Federal Reserve Board will likely come later today.
Investors are betting that at the very least, the Fed will continue with the so-called Operation Twist, under which it keeps long-term interest rates low by shuffling its portfolio between long-tenure and short-tenure debt. The more bullish among them are actually looking for another round of Quantitative Easing. But that second hope looks borderline extreme at this point, and the markets may be setting themselves up for a disappointment on that count.
Also overnight, rumours out of Europe – that the German Chancellor was beginning to yield ground on buying sovereign debt – also propped up investor sentiment, even though they weren’t confirmed.
Back home, the rupee is expected to open slightly weaker, which could weigh on sentiment.
But for today, we’re looking at either a flat opening or a bit of upside at the start.