Markets across Asia are swinging between gains and losses in volatile early trades, in the absence of strong cues from Wall Street overnight and a general sense of lack of direction in the absence of market-moving news flows.
As at 7.30 am IST, Nifty futures are trading absolutely flat, perhaps feeling slothful after an extended weekend holiday - must be all that biryani for Eid. Elsewhere across the region, indices are similarly looking for direction, and not finding it. Investor mood is see-sawing, and some of the key regional indices – Tokyo and Hong Kong, in particular – have been gyrating within a range since the start of trading today.
Overnight, Wall Street too ended lifelessly flat, with investors waiting for further policy action from the US Fed, due out in a couple of days, for clues to a reading of the economy. US Treasuries have been selling off in recent days, raising interest rates in the US, driven as much by the perception that the US economy was doing better than had been feared as by the consideration that Treasuries had been overbought.
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Over in Europe, speculation that the ECB was working to put a cap on bond yields of Spain and Italy was denied by the ECB, but commentators reckon that something is afoot on that front, which could put a ceiling on borrowing costs, which in their estimation could prove a game-change for the eurozone, in a good way.
Back home, foreign institutional investors continue to bet on India, although where they get their faith from is hard to fathom, given the total absence of policy initiatives despite the many promises from the government. In August so far, FIIs have pumped in $1 billion in Indian equities, taking the total for this year to $11 billion.
Reports that Finance Minister P Chidambaram has asked his officials to step up the disinvestment process could cause investor interest to perk up, but given the fractious political environment, the government’s ability to deliver on any promise appears in some doubt.
In any case, for today, we’ll likely see a sedate start to trading.