The eurozone has fallen into a spiral of downgrades, falling economic
output, rising debt and further downgrades. A recession has just
started. Greece is now likely to default on most of its debts and may
even have to leave the eurozone. When that happens, the spotlight will
fall immediately on Portugal, and the next contagious round of
downgrades will begin.
Taiwan’s main newspapers were full of hope this morning for a stock rally today after the pro-business Nationalist Party’s triumph in the island’s presidential election on Saturday. Investors hoped that “post-election, there’d be one or two days of excitement,” said William Dong, head of Taiwan equities at UBS Securities in Taipei. “We didn’t even get that for one day.”
Taiwan shares fell along with most in Asia today on new worries about debt problems in Europe and their impact on global growth.
Global equities are mostly lower. MSCI Asia-Pacific Index fell 1.2%, the largest in a month, led by financials. The re-election of Ma Ying-jeous in Taiwan was widely anticipated, but failed to bring relief to local shares which fell 1.1%. The Shanghai Composite fell 1.7%, the most in the region and now has given back almost 61.8% of the rally from Jan 6. China reports retail sales, investment and industrial production figures tomorrow.
