The Indian markets are poised to open flat to slightly lower on Wednesday following two days of profit taking. With expectations getting slowly priced into the market, investors keenly await policy measures from the Narendra Modi government to boost investor confidence and revive growth. The new government is expected to unveil its budget by early July.
Meanwhile, the first cabinet meeting of the Modi government on Tuesday decided to set up a special investigative team (SIT) headed by former Supreme Court judge M.B. Shah to unearth black money slashed abroad. “This was an important issue for us in the light of the directions of the Supreme Court,” law and telecom minister Ravi Shankar Prasad told reporters after a one-and-a-half-hour-long cabinet meeting.
The benchmark indexes Sensex and Nifty fell 0.7 percent and 0.6 percent, respectively on Tuesday as investors took some profits off the table following recent sharp gains.
Asian stocks are trading mostly higher, with sentiment buoyed by upbeat U.S. economic data and signs of stabilization in the Chinese economy. Profits earned by Chinese industrial firms rose 10 percent to 1.8 trillion yuan in the first four months of 2014, little changed from the 10.1 percent increase in the first quarter, official data showed.
The U.S. dollar held near an eight-week high against a basket of major currencies, spurred by gains in U.S. equities on the back of upbeat economic data. The euro remains on the defensive after ECB President Mario Draghi once again reiterated the central bank has sufficient tools to get inflation back to its target again. Gold prices eased in Asian deals after falling 2 percent to their lowest level in almost a week yesterday.
U.S. And European Markets
U.S. stocks posted solid gains overnight, as more promising signs that the economy is strengthening buoyed investor sentiment. Durable goods orders rose unexpectedly in April and home prices in major metropolitan areas rose more than expected in March, while consumer confidence grew in line with forecasts in May, supporting views of a rebound in economic growth this quarter, separate reports showed.
The Dow rose 0.4 percent, the tech-heavy Nasdaq rallied 1.2 percent and the S&P 500 added 0.6 percent to reach a fresh record closing high for the second straight session.
The major European markets nudged higher on Tuesday, with merger and acquisitions talk and expectations of policy action from the European Central Bank at its June 5 meeting underpinning sentiment. France’s CAC 40 edged up 0.1 percent, the U.K.’s FTSE 100 rose 0.4 percent and the German DAX advanced half a percent.
by RTT Staff Writer
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