Hong Kong: Asian markets are fairly mixed this morning, but the Indian market appears poised for a positive start after the government indicated on Thursday that it was reconsidering some of the regressive tax proposals in Budget 2012.
As at 7.30 am IST, Nifty futures are up nearly seven-tenths of 1 percent, outperforming the other regional markets. Hong Kong too is up, but Tokyo and Sydney are swinging up and down in volatile trades. News out of the European summit to resolve the debt crisis provided no triggers one way or another, and there is increasingly a sense that not much will come of the meeting.
Overnight, Wall Street had a wild ride. It was down sharply at one point after the US Supreme Court upheld President Barack Obama’s healthcare proposal, reading it erroneously as a negative. But then the indices surged after some rumours out of Europe that Germany was getting behind a eurobond proposal.
That was entirely untrue, of course. In fact, the German chancellor had only the previous day said that she sees no prospects for eurobonds in her lifetime. But it was enough for markets to what gains as they may. But the outlook for the day ahead seems not so bright: Wall Street stock futures are down this morning.
Back home, analysts are bucked up by the news overnight that the government is reconsidering some of the draconian taxation provisions in the Budget, particularly the provision on retrospective taxation, as in the Vodafone case.
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With Prime Minister Manmohan Singh showing some signs that he is in the mood for decision action, the prospects for some big-ticket reform announcements have brightened. Crude oil prices are also at an eight-month low, which too bodes well for imported inflation. Investor sentiment, which has been so down and out in recent months, is turning for the better, and analysts are betting on big gains in July.
For today, overseas cues are fairly mixed. And Europe may yet drag down sentiment later in the day. But from all accounts, we could see some upside at the start.