The Hindu Business Line : Market View

Equities now trade at levels that factor in several quarters of relentless growth (and that too on a substantially higher bas) in line what we have witnessed over the past three years. As the market has extended deep into five-digit territory for the Sensex, what has emerged is a further thinning of investor tolerance for even minor disappointment in corporate performance. Even over the past month, there have been a few instances where a marginal degree of earnings disappointment has led to steep losses in stock prices. Even if this does not become a significant factor over the next quarter or two, it is likely to be integral in the next fiscal.

Sundaram BNP Paribas Mutual

Leading pharmaceutical companies appear to be coping well with the global challenges in terms of increased competition and pricing, especially in the generics space. The global health-care sector has been witnessing increased consolidation that could stabilise pricing pressures and augurs well for the sector over the medium to long term. Indian companies have been reasonably active in this consolidation process and have been aggressively scouting for acquisition targets overseas. But numbers suggest that overseas acquisitions are taking longer to pay-off.

Franklin Templeton Investments

The US dollar is due for a renewed downward adjustment that will contribute, along with other factors, to a reduction in the US current account deficit. This adjustment process began at the end of 2001, only to stall in 2004 as the Fed began to raise US interest rates. However, several factors suggest the dollar is likely to resume its downward path in the months ahead.

Specifically, we see three fundamental factors that we believe contribute to a weaker dollar. First, the Federal Reserve's decision to pause its tightening campaign should erode the support the dollar has been getting from higher interest rates in the US relative to other countries. Second, while the dollar will for some time remain the preferred currency for other countries' foreign exchange reserves, the share of dollars in those reserves has begun to decline and will likely continue to decline in coming years. Third, the US enjoys the "exorbitant privilege" of borrowing in its own currency, which means that dollar depreciation will, other things equal, tend to stabilise the US net international liability position.

PIMCO bonds, Global Perspectives

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