'Risk of another Lehman still looms in mkts'

Posted By: Staff
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New Delhi, Sep 22: Moody's on Monday, Sep 21, said even though Asian stocks may have rebounded from the collapse of Lehman brothers, but there is always a risk of another major event that still looms in financial markets.

"Financial markets are also influenced by liquidity and events. With many central banks in the region worried about excess liquidity feeding into higher inflation, monetary tightening could weigh on equities' performance in coming months," Moody's said.

"Meanwhile, the risk of another major event rocking financial markets will always remain," it said.

Moody's said low interest rates in advanced economies and better growth prospects have led to a sharp pick up in foreign institutional investment.

"Based on leading indicators, investors' optimism about Asian emerging markets appears warranted. In coming quarters, inventory restocking will boost production," the firm said.

"Purchasing managers' indices in China, India and the Philippines show new orders and production are rising at a fast pace, while labour market conditions are stabilising," it said.

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