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Last Updated : Mar 22, 2016 05:33 PM IST | Source: CNBC-TV18

Consumer sentiment in Europe still fragile: Lakefield Partners

Though the impact of the blasts will be short lived and there won't be any substantial impact if consumer sentiment is not affected too much by it, says Bruno Verstraete of Lakefield Partners


The consumer sentiment across Europe continues to remain fragile, despite the European Central Bank (ECB) actions, says Bruno Verstraete of Lakefield Partners. The twin blasts at Brussels airport too will have a sentimental impact, he says.


Though the impact of this attack (blasts) will be short lived and there won't be any substantial impact if consumer sentiment is not affected too much by it, he says.

Below is the transcript of Bruno Verstraete's interview with CNBC-TV18's Ekta Batra and Mangalam Maloo.

Mangalam: We are getting some bad news coming in from Brussels and at the same time concomitantly the European markets are at the low point of the day. How much of that would you attribute to the sentiment weakness that we are seeing because of Brussels or how much of that is also because of other trading reasons?

A: This event as in many other times will affect the consumer sentiment which is still very fragile in Europe. The European Central Bank (ECB) has been trying to pump up that sentiment due to their last actions. It remains to be seen how it will evolve. However this sort of event is not helping to increase the sentiment and that is what the investors are reacting to at this moment.

Ekta: The primary reason that the DAX is currently down around 0.80 percent as well as FTSE as well as CAC would be attributed in terms of sentiment hit with regards to what has happened in Brussels?

A: I think it is. Revival in the equity prices has taken place in the last few months and I think investors which have reinvested in it are clearly very vulnerable for any sentiment change. Clearly this will be short lived, it will not have substantial economic impact if consumer sentiment is not too affected by it. However that remains to be seen.

I think the investors mood is not benefitting from this sort of event even if they are short lived on the equity prices. Today I think that is indeed the main contributor to the moves.

Ekta: In the past couple of months there has been so much talk about after what took place in Paris and maybe incremental threats that we could see for the European Union, is that largely factored into markets or is that a big risk that markets are now working with?

A: It is a new reality that one needs to adjust to. Clearly we had a very calm and quiet period after 9/11. I think now we are back into that sentiment and the consumer will eventually get used to it as bad as it is. However  I think the longevity of these sort of events will clearly not impact long term but it will slowdown the revival of the economy that we saw in Europe very prematurely. It needs to gather ground in order to calm down the investors and make them look at a more normalised economy.

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First Published on Mar 22, 2016 01:56 pm
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