Lacklustre start to the trading week; Europe ghosts return

Not a great start to the trading week in Asia as the old and familiar ghosts of Europe have returned to haunt the markets.

Asian indices are down at the start on fresh fears over the debt crisis in Europe.

Japanese markets are on holiday, but Hong Kong, Australia, Seoul and Shanghai are all down.

There are increasing signs of edginess as European leaders scamper to head off an escalating crisis in Greece, which is expected to run out of funds as early as next month.

There are reports that European leaders have warned Greece that no further financial aid will be forthcoming unless Greece gets its act together and meets its savings targets.

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[caption id=“attachment_86690” align=“alignleft” width=“380” caption=“A top Chinese policymaker suggested that China faces its own version of a subprime housing crisis.”]  [/caption]

All this has meant that the momentum of last week, when stock markets rallied on the expectations of a turnaround in sentiments in Europe will not be sustained today.

Over the weekend, a top Chinese policymaker suggested that China faces its own version of a subprime housing crisis.

Debts incurred by local governments in China are “our own version of the US subprime crisis”, he said.

It’s a theme that we’ve explored at great length at Firstpost, and this morning, it has had investors unnerved that China, which was seen as cash-rich and safe, too could be heading for a debt crisis.

Back in India, markets have had a day to absorb the latest rate hike from the RBI, and they seem to have taken it in their stride.

Tomorrow, however is another day. The market outlook today doesn’t look overly bright.