Comment: Euro-zone GDP numbers shaky, Indian Markets up After Election Exit Polls
May 16, 2014 7:52 am
European stock markets were steady Friday as yesterday’s dire GDP reinforced the argument that the European Central Bank will have to take aggressive action to stimulate economic growth in the region. That said, upside momentum is being pressured by the latest development in Ukraine.
Traders are unnerved by reports that Ukrainian troops moved to force Russian separatists from their eastern towns Slovyansk and Kramatorsk, citing acting President Oleksandr Turchynov. There are worries this will fuel the crisis further between the two countries and grow the rift further. Western policymakers have vowed to impose further sanctions on Russia if the country undermines Ukraine’s presidential election later this month. With the latest escalation of the crisis, it appears more than likely that Western powers will have to resort to harsher sanctions but the question is if Russia is truly affected by these sanctions or if it even cares. Russia’s MICEX index was off 0.4% to 1,377.00 while the ruble dropped against the US dollar, trading hands at around 34.790 rubles.
Across the market, Core government bond yields held near multi-month lows while stock markets are attempting to stabilize, still trading near multi-year highs. Overnight, US stocks declined after data on Thursday showed US industrial production unexpectedly fell, while in Asia most markets felt the fallout of a weak US session.
Over in India, equities rose to record levels as exit polls suggest that Narendra Modi has swept to power, with traders celebrating a landslide election victory for the economic reform-focused BJP. As such, the S&P Sensex equity index is up around 2.1% to a record high while the Indian rupee is up some 0.9% versus the US dollar to a 9-month high of Rs58.89.
Looking ahead, the economic agenda is rather subdued with much of the attention on US housing starts and the University of Michigan confidence data. US stock futures are trading lower ahead of the open on Wall Street, indicating weakness following Thursday’s retreat for major equity benchmarks.
European stock markets were steady Friday as yesterday’s dire GDP reinforced the argument that the European Central Bank will have to take aggressive action to stimulate economic growth in the region. That said, upside momentum is being pressured by the latest development in Ukraine.
Traders are unnerved by reports that Ukrainian troops moved to force Russian separatists from their eastern towns Slovyansk and Kramatorsk, citing acting President Oleksandr Turchynov. There are worries this will fuel the crisis further between the two countries and grow the rift further.
Western policymakers have vowed to impose further sanctions on Russia if the country undermines Ukraine’s presidential election later this month. With the latest escalation of the crisis, it appears more than likely that Western powers will have to resort to harsher sanctions but the question is if Russia is truly affected by these sanctions or if it even cares. Russia’s MICEX index was off 0.4% to 1,377.00 while the ruble dropped against the US dollar, trading hands at around 34.790 rubles.
Across the market, Core government bond yields held near multi-month lows while stock markets are attempting to stabilize, still trading near multi-year highs. Overnight, US stocks declined after data on Thursday showed US industrial production unexpectedly fell, while in Asia most markets felt the fallout of a weak US session.
Over in India, equities rose to record levels as exit polls suggest that Narendra Modi has swept to power, with traders celebrating a landslide election victory for the economic reform-focused BJP. As such, the S&P Sensex equity index is up around 2.1% to a record high while the Indian rupee is up some 0.9% versus the US dollar to a 9-month high of Rs58.89.
Looking ahead, the economic agenda is rather subdued with much of the attention on US housing starts and the University of Michigan confidence data. US stock futures are trading lower ahead of the open on Wall Street, indicating weakness following Thursday’s retreat for major equity benchmarks.
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