Risk of a recession in European Economies

Risk of a recession in European Economies

Asian markets placed the modest gains after Italian Prime Minister Silvio Berlusconi said he would step down, boosting optimism that problems in the euro zone may ease.

Japan's main index rose 1%, South Korea was up 1% and Australia gained 1.5%. US markets had gained earlier on the news.

Investors have been worried that Italy's high debt levels and low growth rate could see it struggle to pay back its government bonds.

However, analysts said the limited reaction in the equity markets showed that concerns over Italy and the health of euro zone economies persist.

"The gravitational force is pulling the European area down into a recession, this is why Asian markets are so sceptical," said Arjuna Mahendran from HSBC Private Bank.

Further evidence of the lukewarm reaction came from the euro, which was little changed in Asian trade againt the US dollar.

Full Story

No comments:

Post a Comment