Asian stocks see-saw; euro wobbles on EU debt crisis

The outlook today is for a moderately weak opening, with some volatility. Across Asia, stock indices are swinging up and down this morning. The cues from Wall Street overnight were weak: all three indices finished with losses for the day.

Markets in Japan, Hong Kong and Shanghai are seesawing in a band - first down, then up. It’s hard to discern a clear trend in early trades.

Overnight losses on Wall Street were driven by underlying downbeat sentiment on account of concerns of a slowdown in Europe, where GDP data came out yesterday. Financial sector stocks in particularly fared very badly.

Yesterday’s meeting between the German and French leaders to address the Eurozone debt crisis turned out to be a damp squib. Both leaders rejected a plan to issue euro-zone bonds but instead proposed a new financial-transaction tax as a possible remedy for the sovereign debt crisis.

But that’s likely to run into political opposition in Germany, where the tolerance for propping up indebted peripheral states is running low.

Back home, too, the domestic sentiment is distinctly down. A Bank of America Merrill Lynch survey of fund managers points to the fact that in August, India is the least-favoured equity market among emerging market investors.

Foreign investors are also concerned that political developments overnight, following the detention of Anna Hazare yesterday, may lead to another political gridlock, which could be a drag on the economy and on investor sentiment.

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