The natural catastrophe in Japan combined with increasing danger to human life on account of radiation from nuclear plants has roiled the Japanese market. The event has set the tenor for markets worldwide and conversations in the studio. Here is a slice:

Prarthana: What a terrible start it was to the week! Almost 12,000 people have lost their lives in Japan, five million are homeless and the nation is grappling with how to contain nuclear radiation.

Vedant: Yeah, the financial impact of destruction caused due to the Tsunami and the earthquake has been estimated to be $200 billion. 20 percent of market capitalisation in Japan was wiped out in just a couple of days!

Prarthana: The Japanese Central Bank has ploughed around $290 billion into the money markets in an effort to assuage fears of any strain the banking industry may face.

Vedant: Interestingly, the Yen is expected to rise sharply as there is speculation that the Japanese would repatriate a lot of cash in the wake of the quake there. But people like Stephan Roach of Morgan Stanley feel that even after the Kobe earthquake in 1995, rebuilding effects didn't last long and it really did not do anything to bring to end Japan's ‘lost decade'.

Prarthana: Meanwhile, after an initial fall, our markets continue to be in a volatile mode, with no serious direction. Inflation continues to rule high.

Vedant: True. Countries around the world are doing a rethink on their nuclear plans after the Japanese disaster. This in turn has led to speculative increase in crude oil prices. Even if other commodities abate, oil alone is enough to stoke inflation fears.

Prarthana: , No wonder, RBI has once again raised key interest rates as a part of the monetary policy tightening. Home loans and corporate borrowing costs may go up and affect overall growth! On the flip side, there may be one last burst of rise in deposit rates.

Vedant: The domestic M&A scene is getting more interesting by the day. Nippon Life has picked up a 26 percent stake in Reliance Life Insurance for $680 million. Did you know Nippon Life is the largest private life insurer in Asia and Japan? Well, this shows how global players want a share of the Indian pie!

Prarthana: All the ADAG stocks have climbed higher after this news. Even RCom, with a ratings upgrade on its debt, has spiked. And hey, speaking of M&A, Goldman Sachs has bought out Benchmark Mutual for Rs 130 crore, in a deal valued at a little over 4 percent of assets under management.

Vedant: With the monetary policy past us, the markets would look to global economic cues for the next 3-4 weeks before the result season is upon us.

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