The Hindu Business Line : Western markets on a high

The Western stock markets, led by the US, the European Union and Japan, have hit a record highs fuelled by growing number of institutional and private investors. The Western corporate sector is reporting record profits and companies propose to put cash hoards to work. This also offers a possible boost to the global economy. The US corporate sector has savings of $100 billion-plus looking for investment venues at home and abroad. There is also an edgy nervousness amid talk of "bubble bust" and such sentiments are dampening investment excitement.

Apparently even astrologers say the stars are aligned for an investment disaster. However, the consensus bottomline — minus the dramatics — is that a "correction in markets" is "both unavoidable and indispensable." Only, when and for how long?

There is also much uncertainty on trade front. At the April 30 World Trade Organisation meeting, trade ministers may agree to a broader principle of reducing tariffs and trade barriers on agricultural and manufactured products. This has been a highly divisive issue — as the US Trade Secretary, Mr Rob Postman, put it: "We did not always agree but we agreed we need to keep on trying."

Last weekend, the EU and Brazilian Trade Ministers said, "we have inched closer to resolution." The participating officials at WTO-initiated meetings have now agreed to reach a consensus before the self-imposed April 30 deadline to create a new global trade and tariff order to further boost the global economy. The strategy will be outlined at the WTO trade talks on April 30.

The developing nations want — according to Mr Peter Mandelson, EU's Trade Minister — "big concessions on their farm exports to the developed countries and in return they could grant freer excess for manufactured goods and services from the developed countries."

A breakthrough on this score is now a "strong probability," according to Mr Pascal Lamy, the EU Director-General. European observers have noted that India has offered a "consensus strategy based on pragmatism.

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