Emerging markets to be under pressure ahead: IG Markets

In an interview with CNBC-TV18, Justin Harper of IG Markets, spoke about the worsening conditions in the European markets and the road ahead. 

Below is an edited transcript of Harper's interview on CNBC-TV18. Also watch the attached video. 

Q: The pressures from Europe refuse to recede both in the equity markets as well as in the currency market. This morning we see the euro slip to 1.25, a level that we haven't seen for 20-25 months. Do you expect more pressure in equities?

A: Yes certainly I do. What we saw last night in Europe and the big sell down is another downward twist in this sorry saga. We hope that markets will stabilise a little bit. We talk from the G8 and eurozone members about continuing to focus on growth but obviously hasn't convinced the markets.

We have seen the euro slip below this level that hasn’t seen for almost two years, which is indicative of a feeling of pessimism about the eurozone. So, it can fall further in the days and weeks ahead as we head towards the Greek election. There are some great dark days ahead for the region.

Q: What kind of an effect are you seeing in that period as we head to the Greek elections? What kind of an effect you are expecting on the emerging market space?

A: They will continue to be knockdown by what's happening in the developed markets. They are very sensitive to issues within Europe as a major trading partner and the feeling of pessimism is coming out of Europe.

The emerging markets have been on the slide. They have faced a lot of pressure not just from the eurozone but from weaker growth coming out the US and China as well as. So it’s a very tough time for them to see any sort of growth during this uncertain period.