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Investors globally were awaiting US consumer price index data that would provide more clarity about the quantum and frequency of interest rate cuts by the US central bank this year, apart from the debate between presidential contenders Kamala Harris and Donald Trump.
At 8:05 AM, GIFT Nifty futures were at 25,083, in-line with Nifty futures’ last close, which affirmed the flat start for Indian markets today.
That apart, Asian stocks wobbled on Wednesday, while oil prices loitered around three-year lows on concerns over a weak demand outlook.
Japan’s Nikkei 225 shed 0.7 per cent and the Topix was down 0.86 per cent, while South Korea’s Kospi slipped 0.20 per cent. However, the small-cap Kosdaq rose 1.61 per cent.
Australia’s S&P/ASX 200 was marginally higher and Hong Kong’s Hang Seng index futures were at 17,072, lower than the HSI’s last close of 17,190.
Democratic Vice President Kamala Harris and Republican presidential candidate Donald Trump will meet in their first and perhaps only debate, a clash that could prove pivotal in their battle for the White House.
While the debate is unlikely to sway near-term monetary policy, investors will keep an eye on whether either candidate talk about fiscal policies and plans for the economy.
That has left investors skittish in Asian hours, with MSCI’s broadest index of Asia-Pacific shares outside Japan 0.08 per cent lower. Japan’s Nikkei fell 1 per cent in early trading.
Investor focus will then switch to US Labor Department’s consumer price index report for policy clues although the Federal Reserve has made it clear employment has taken on a greater focus than inflation.
The headline CPI is expected to have risen 0.2 per cent on a month-on-month basis in August, according to a Reuters poll, unchanged from the previous month.
While the Fed is widely expected to cut interest rates next week, the size of the rate cut is still up for debate, especially after a mixed labour report on Friday failed to provide clarity on which way the central bank could go.
Markets are currently pricing in 66 per cent chance of the US central bank cutting rates by 25 basis points, while 34 per cent chance is ascribed for a 50 bps cut when the Fed delivers its decision on Sept. 18, CME FedWatch tool showed.
In commodities, oil prices stabilised a bit but still hovered near their lowest in three years after OPEC+ revised down its demand forecast for this year and 2025.
Brent crude futures was last 0.5 per cent higher at $69.54 a barrel. US West Texas Intermediate (WTI) crude rose 0.6 per cent to $66.16 a barrel.
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