Economy Aug 1, 2012
Hong Kong: Markets across much of Asia are trending down in early trades, but the Indian market is holding its ground, perhaps in the expectation that newly appointed Finance Minister P Chidambaram will revive investor sentiment with some long-delayed policy initiatives.
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As at 7.30 am IST, Nifty futures are trading flat, although the cues from the rest of the Asia-Pacific region are somewhat more downbeat. Weak PMI data out of China and South Korea this morning is proving a dampener on sentiment. Hong Kong's Hang Seng index is down nearly two-tenths of 1 percent, and Tokyo has slid by over 1 percent. China's official PMI data - which measures the heartbeat of the larger state-owned enterprises - was down just a tick, but still in expansionary territory. The HSBC PMI index, which gets a gauge of the private sector manufacturing, improved a bit, but was still in contractionary mode.
Curiously, the Shanghai market is up, perhaps on expectations that the data is bad enough to warrant another round of stimulus measures from Beijing.
Overnight, Wall Street slid lower on tepid economic data, and the expectation that the US Fed and the ECB will likely hold back from full-blown monetary stimulus measures. For markets hooked on these artificial steroid boosters, that's bad news in the short term.
Back home, the return of Chidambaram to the Finance Ministry has industry leaders hopeful of some policy action, but expectations of a dramatic turnaround are perhaps unrealistic. Nothing has changed about the political dynamic, and to that extent, he will be hemmed in by the same constraints. Yet, hope lingers.
For today, we'll likely see a flat start to the trading day.
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