Quite a puzzling start to trading this morning.
Yesterday’s surprise rally in Mumbai on expectations of a rate cut appears to have legs, going by early trading on the Nifty futures, which are edging up even as the rest of the regional and global markets are drifting down.
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As at 7.30 am IST, Nifty futures are edging higher from a weak start. Given all the grim news on the domestic economic front, and the daily dose of shocks from Europe, that’s quite a contrarian mood.And even the hope that propelled the Indian market yesterday – that the RBI would consider a CRR cut – seems to rest on infirm ground. The consensus among analysts is that it will hold steady, but indicate the likelihood of easing early in 2012. Yet, it’s gained enough traction to push up the market yesterday, quite against the grain of markets around the world.
Elsewhere across Asia, all the major indices opened marginally in the red, but they are coming off their lows. In early trades, they appeared to have picked up negative cues from Wall Street, which finished to the downside overnight, disappointed that the US Federal Reserve Board did not ease rates, although it kept the door open for that possibility by pointing to risks from the eurozone.
Back in India too, analysts are generally agreed that the Nifty will likely trend downwards. But as happened yesterday, we could just be in for a surprise, going by how Nifty futures are trading this morning.