Why the region remains 'relatively stable' in unstable world

ON ASIA

After a strong start to the year, Asian equity markets have fallen in recent months as familiar external headwinds have returned.

Investor risk aversion has increased as the eurozone debt crisis reaches a new and critical phase, while signs of a faltering global economic recovery have led to uncertainty in the outlook for global growth. Uncertainty also surrounds the outlook in China and the degree to which China’s economic growth is decelerating. Economic data has been mixed. While PMI data has been positive and property transactions have picked up recently despite relatively high prices, recent data for industrial production, retail sales and loan growth have been weaker than expected. Doubts have risen as to whe...