Asian investors need to keep eurozone enthusiasm in check

With ECB monetary easing under way, they should prefer neutral stance on equities and stay negative on euro vs dollar.

IN the first six months, our Asian-based clients expressed increasing interest in eurozone stocks and debt as eurozone members emerged from recession. In the past few months, however, the economic backdrop has changed.

The latest data revealed eurozone growth stalled in the second quarter, while the European Central Bank (ECB) announced an asset-purchasing programme to revive the bloc's flagging inflation. However, despite the ECB announcement, Asian investors should remain cautious on eurozone stocks in particular as the effectiveness of the ECB's measures is far from assured.

The ECB is embarking on a new plan to set off a domino effect of substantial asset purchases, increased liquidity, more...

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