A BIG DAY GLOBALLY – ALL ON WAIT-AND-WATCH MODE

By Ruma Dubey

The big event for India is over – yesterday’s credit policy. But that would have been the end of it all if we had been a closed economy and did have the current global perspective and participation that we have today.

Today we look at events across the world – some have a direct bearing on our market while some indirectly, in terms of sentiments. Thus what happens in USA, UK or even Japan has an impact on our markets.

The market is listless today – firstly because there is no immediate trigger in the domestic market and secondly because worldwide there are so many lined up – political as well as fiscal. And till all these events get cleared up, the Indian markets, for lack of anything major happening here, will look at these events for cues.

First and foremost, all eyes will be trained on UK. The voting is on and will end in the night – 10 PM British time and 2.30AM India time… we might get the poll results only in the early hours of tomorrow dawn. It is touted to be a tough fight with Liberals and the Conservatives running neck-to-neck. May might have played this very smart gamble but hope the month of June does not bring her a rude shock! The fate of how Brexit will now move ahead, how it will be negotiated with Europe is what this election is all about. The impact of UK elections on India is minimal but because we are closely linked, sentiments are what will make a difference.

Before that, today evening, 5.15pm India time to be more specific, the European Central Bank (ECB) will announce its policy decision and later there is also a Press Conference scheduled by Mario Draghi. Nothing is expected to be announced in the policy but all ears will be on Draghi’s words, whether he stops saying, “downside risks to growth and weak inflation outlook.”

Tonight is also the “great television night” in USA. Former FBI Director James Comey’s testimony is a huge TV event and Trump has promised to keep the drama going with his Live Tweets. Comey has already released his prepared testimony, saying the president asked him to end an investigation into the former national security adviser. Let’s see how this goes. People expect that if truth emerges, Trump might get dislodged but nothing like that is going to happen. There is talk of impeachment but constitutional law experts in USA say that the exhaustive political process to remove the president could only begin when, and if, there’s enough evidence to suggest Trump committed "treason, bribery, high crimes and misdemeanors." So those expecting political turbulence in USA can expect this to end like a damp squib.

The Japanese yen strengthened today on a reports that the Bank of Japan is relooking at that way in which it will handle a future exit from monetary stimulus.  The Chinese/Hong Kong stock markets were up as reports were released of Chinese exports in May going up 8.7% from a year earlier, more than expected. China's trade surplus widened to $40.81 billion from $38.05 billion.

In the Middle East, Qatar has been isolated by its neighbours – UAE, Saudi Arabia, Bahrain and Egypt on accusations that it has terror links with Iran. Flights to and fro from there are suspended while Qatari  residents and visitors have been asked to leave these countries in the next 12 days. Qatar is not a major oil player but the unease in the already stressed region has increased. This will not impact any stock markets except those in the region but gold prices could see an upswing.

So there are three major international events scheduled for today alone; a huge day globally. Thus it’s best to wait and watch. That is what our markers are doing or forced to do anyway.