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Economy Jul 16, 2012

Nifty futures up ahead of inflation data; Asian markets mixed

By Venky Vembu

Hong Kong: All eyes will be on the June inflation data due out in India later today, but ahead of that, investor sentiment reflects an undercurrent of nervousness.

As at 7.30 am IST, Nifty futures are trading up about two-tenths of 1 percent, around the 5250 mark, but they've come off their early morning highs in line with the choppy trading sentiment all across Asia this morning.

Tokyo is closed for a local holiday, but most of the other leading indices across the region have given up their gains and are trading flat or have slipped into the red. Sydney is the one market that's holding on to its gains.

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Much of the nervousness in the region is driven by concerns about China corporate earnings in the face of a slowdown that is manifesting itself.

Reuters

Back home, inflation data holds the key, and analysts reckon that anything that is lower than 7.5 percent will be well-received, and be read as a sign that the RBI has some elbow room to ease rates later this month. In particular, investors will be hoping for a core inflation reading lower than 4.5 percent.

Foreign institutional investors have brought in over Rs 7,300 crore into the Indian market in the first two weeks of July, which represents a reversal of sentiment from the downbeat tone of recent months. So far in 2012, FIIs have been buyers to the tune of Rs 50,000 crore, although that doesn't come through adequately given the rollercoaster ride of this year.Analysts expect some policy action to unfold right after the Presidential election.

Therupee is expected to open slightly weaker today.

Overall, we'll likely see a mildly positive start to the trading week, with data release and corporate results giving markets a sense of direction.

by Venky Vembu

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