Asian indices tumble; Nifty futures too edge down

Hong Kong: Markets across Asia are down sharply in early trades, but curiously the Nifty futures market, a barometer of investor sentiment, has been relatively immune to the negativity.

As at 7.30 am IST, most indices across Asia are down in excess of 1 percent on weak cues from Wall Street overnight and grim news out of Europe centred around preparations for a Greek exit. Shanghai alone is swimming against the bearish current, and is up marginally, on hopes of a stimulus package in China. But elsewhere, sentiment is weighed down also by Fitch’s ratings downgrade on Japan.

[caption id=“attachment_318165” align=“alignleft” width=“380” caption=“Overnight, Wall Street made some early gains after strong housing data, which pointed to a revival of the market. Reuters”]  [/caption]

Nifty futures too were somewhat out of step with the rest of Asia, and were actually up a tick in early trades. But since then, they too have edged down, although the fall thus far - of the order of about two-tenths of 1 percent - is nowhere near as severe as in the other markets.

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

Overnight, Wall Street made some early gains after strong housing data, which pointed to a revival of the market that was at the epicentre of the financial crisis of 2008. But those gains vanished into thin air after the former Greek Prime Minister suggested that preparations for a Greek withdrawal from the eurozone were under way. All three leading Wall Street indices finished about flat, but the undercurrent is very nervous.

Back home, the rupee’s continuing slide has investors and analysts fretting. The RBI’s interventions on the margins haven’t helped to shore up the rupee - and if anything, it led to a liquidity squeeze, which the RBI is now addressing through open market operations of the order of Rs 12,000 crore. That should ease the liquidity problem, but the rupee’s core problems remain, and the RBI may be fighting a losing battle on that front.

All things considered, given the downbeat sentiment in overseas markets, we’ll likely see a weak start to the trading day.