Spain, Pain & Sprain………
PIIGS : Portugal, Ireland, Italy & Greece.
PIIGS is really going through pain. And now core area of pain is Spain.Europe contagion now spreads to Spain and Portugal. Suicides case in Portugal at all time high.
This proves that people in Europe are not happy. So how can economy do well when people are not feeling good? With Spain’s three-month-old government struggling to reduce the budget deficit and crack down on overspending by regional administrations, borrowing costs have surged, nearing the levels that precipitated bailouts for Greece, Portugal and Ireland. Spain may “aggressively” tap support from the ECB instead of seeking a bailout. European Central Bank Executive Board member Benoit Coeure triggered speculation that the bank will revive its bond-purchase program to lower Spain’s borrowing costs as the region’s debt crisis threatens to boil over again.
We expect a very significant intensification of the euro- area debt crisis to materialize this quarter as the market refocuses on the fundamentals and the fiscal challenges of each country. Would Spain won’t need a bailout and will regain investors’ trust with the deepest austerity measures in three decades, including spending cuts and tax increases?
Our view for market is still bearish. Nifty is having a strong support at 5135.Nifty expected to trade in range of 5135 to 5350.
Sr Vice President
wiTdom investment advisory.
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