Asia took Europe in its stride. Europe's woes no more make news. They absorbed the news of stress tests quite well; and the Asian markets rose and that seemed largely driven by sentiments on USA the world's largest economy doing well. Thus the Euro was left not to weaken as markets whispered that European banks may have only a few billion dollars needed to recapitalize for loss categories in non performing assets.
While it looks like Europe is discounted for, one has to wait to receive further positive news. Market may have already factored in a lower business sentiment in Germany. However, this strengthening of euro seems to affect European competitiveness rather adversely. So European companies would be under pressure. High end companies like BMW and Benz may not be affected as their buyers are rather price inelastic (as they are luxury - 'to be seen to possess categories') . But the Medium enterprises would be under pressure as the euro appreciates. This sector normally is a job multiplier one as high end companies are very technology driven. Joblessness in Europe is quite high and there are no immediate prospects of revival there.
Buoyed on the back of Europe and US data, Mumbai might rise in the morning trades but by afternoon, the in and out trader would have booked his gains and exited . Until the RBI responds to the FM's call for an interest rate cut (the intransigence of the Central bank!!!) there is nothing much for corporate sector to hope for.
jaynayar@gmail.com
While it looks like Europe is discounted for, one has to wait to receive further positive news. Market may have already factored in a lower business sentiment in Germany. However, this strengthening of euro seems to affect European competitiveness rather adversely. So European companies would be under pressure. High end companies like BMW and Benz may not be affected as their buyers are rather price inelastic (as they are luxury - 'to be seen to possess categories') . But the Medium enterprises would be under pressure as the euro appreciates. This sector normally is a job multiplier one as high end companies are very technology driven. Joblessness in Europe is quite high and there are no immediate prospects of revival there.
Buoyed on the back of Europe and US data, Mumbai might rise in the morning trades but by afternoon, the in and out trader would have booked his gains and exited . Until the RBI responds to the FM's call for an interest rate cut (the intransigence of the Central bank!!!) there is nothing much for corporate sector to hope for.
jaynayar@gmail.com
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