Find out: What's leading to weakness across Asian markets?

Excerpts from Business Lunch on CNBC-TV18 Watch the full show »

ALSO READ

• See what other FIIs are saying about the markets
• See what other experts are saying about markets
• See what Udayan Mukherjee is saying about the markets

Asian stocks declined for a second day as companies reported earnings that missed estimates and after commodity prices dropped.
In an interview with CNBC-TV18, Tim Condon, Head of Research, Asia, ING Financial Markets, speaks about what’s leading to this bout of weakness across the Asia.
Below is a verbatim transcript of his interview with CNBC-TV18's Mitali Mukherjee. Also watch the accompanying video.
Q: What’s leading to this bout of weakness across the Asia? Is it to do with the commodities or are earnings performances falling through?
A: A combination of things, the anxiety about what Bernanke says at his press conference tomorrow, the weakness in the commodity complex. All these have undermined a little bit of confidence in the global growth outlook and led to some profit taking.
Q: How is liquidity positioned currently ahead of that comment from Ben Bernanke and indeed given the underperformance these markets have started displaying over the past few sessions?
A: The people are a little bit anxious and would like to take some money off the table ahead of this. The fear maybe that Mr Bernanke will sound a little bit more dovish and highlight the risk to the growth outlook more than people would like. We could see a bit more weakness in these risk assets.
Q: If there is a firm indication though from him on the fact that QE2 will be stopped and there will be no QE3, would you expect to see a much sharper reaction on markets on the downside?
A: That’s hard to say because the US economy is limping along. The evidence is that the US economy is limping along. It would be in this circumstance very unusual for Mr Bernanke to display such bullishness about the end of QE2 and unambiguously state that there would be no QE3. It’s definitely not a politically popular policy. But the fact is that the US economy is very weak and conducive to additional stimulus. Probably what we are going to get is comment to the fact that the economy is performing in line with the Central Bank’s base line scenario. The market expectations will be more reinforced that QE2 ends on schedule.