Markets may open lower following weakness across Asian markets after Japan's credit rating was downgraded by Moody's, citing country's large budget deficit. The Nifty futures on the Singapore Exchange plunged 49 points, to 4,903.
Markets across Asia reversed early gains after ratings agency-Moody's Investor Service downgraded Japan's credit rating from Aa3 to Aa2 due to large build up in government debt since 2009 and a high budget deficit. The Japan's Nikkei Stock Average declined 0.2%, Hong Kong's Hang Seng declined 0.9% and China's Shanghai Composite was trading flat.
Overnight, Wall Street locked gains for the second consecutive day after recent data showed a weaker than-expected housing market. The Dow Jones Industrial Average added 3%, the Nasdaq Composite Index and S&P 500 surged 3.4%.
All eyes are on Federal Reserve's monetary action, analysts expect Ben Bernanke to introduce some form stimulus to bolster the ailing economy. While another round of stimulus by Federal Reserve may bring foreign institutional flows back to India, macro-economic conditions continue remain a concern. Analysts recommend investors to continue buying on dips. Motilal Oswal, CMD of Motilal Oswal Financial Services said, “there are two reasons — high interest rates and government inaction which weighing on investors mind. But, I think current levels provide good opportunity to look at some of the large, reputed companies.” Oswal finds select auto, telecom and FMCG companies attractive in the current market.
