Europe stocks close down on day nine of shutdown
India is also not yet compliant with a European data privacy directive, which limits some of the work that can be moved to the country. “Europe has been a very conservative market compared with the U.S.,” said Sharat Kumar, head of delivery for Europe at No. 5 Indian player Tech Mahindra (TEML.NS), whose European clients include food giant Nestle SA (NESN.VX) and aerospace firm EADS (EAD.PA). “The customers are conservative in starting the initiative, but once they do, these are the customers that don’t just go back and forth or drop it, so what we’ve seen is that there is a lot more stability in the European customer,” he said. For European companies, many of them battered by a prolonged economic slowdown, Indian IT firms offer cost advantages to using local vendors or doing the work in-house. Global rivals such as IBM (IBM.N) and Capgemini (CAPP.PA) also have big operations in India that can take advantage of lower costs. Indian vendors are also taking on increasingly complex work. “To a certain extent, the skills shortage in continental Europe is driving the growth for offshore openness,” said Katharina Grimme, a principal consultant with outsourcing advisory Pierre Audoin Consultants (PAC) in Cologne, Germany. LOCAL CHALLENGES Indian IT’s progress in Europe comes at the expense of local vendors, which according to NelsonHall are seeing flat sales. In 2009, India’s TCS ranked just 21st in IT services revenue from Europe, the Middle East and Africa, but rose to 11th at the end of 2012, according to PAC. Indian rivals Wipro WIPR.N and Infosys ranked 18 and 23, respectively, in 2012, after not cracking the top 25 in 2009.
Europe and Middle East
In the corporate sector, shares of Novartis AG gave up 0.7% after J.P. Morgan Cazenove cut the drug maker to neutral from overweight. Clariant AG added 1% after HSBC lifted the chemicals firm to neutral from underweight. 3:26 a.m. Oct. 8, 2013 James Chanos, founder and managing partner of Kynikos Associates, discusses China, the energy sector and Tesla while speaking to WSJ’s Liam Denning at WSJ’s Heard on the Street event, “Investing in an Age of Easy Money.” (Photo: Getty) 3:09 p.m. Oct. 7, 2013 The U.K.s benchmark stock index heads for its lowest closing level in more than six weeks on nervousness about the prolonged U.S. government shutdown. 12:11 p.m. Oct. 7, 2013 Europe stocks drop on Monday as investors move into the second week of the U.S. budget stalemate and shutdown, with investors rattled as the weekend offers no hope for a near-term resolution. 11:58 a.m. Oct.
Europe Stocks Pressured by US Political Worries
default. The Stoxx Europe 600 index closed at 305.13, a loss of 0.6%. On Tuesday, the index fell 0.8%, marking the biggest percentage decline since Aug. 30. U.S. stocks slipped after fluctuating between small gains and losses in early activity. In Europe, some bank stocks gained ground, helped by the news about Yellen, who is viewed as accommodative on monetary policy. Italian stocks also bucked the weaker tone, with the FTSE MIB index rising 1% to 18,551.57. A top executive at BlackRock said he sees Italian stocks as among Europe’s most attractive, Reuters reported. Telecom Italia SpA rose more than 6%. The U.S. government shutdown, meanwhile, entered its ninth day, with the debt-ceiling deadline of Oct. 17 grew ever closer. President Barack Obama said Tuesday that he won’t negotiate with his opponents until the government is reopened and the debt limit is raised.
IBEX 35 — The FTSEurofirst 300 Index provisionally closed down 0.6 percent to 1,223.55 points, while the FTSE 100 fell to three-month lows, finishing down 0.6 percent. The German DAX was also down 0.6 percent. However, Spanish and Italian stocks rallied after the countries’ sovereign bonds sold well at auction, adding to improved sentiment towards the euro zone’s southern economies. The IBEX 35 rose 1 percent while the FTSE MIB closed up 0.9 percent, with Caixabank and Banco Santander posting healthy gains. The Spanish government managed to launch a 30-year bond on Wednesday for the first time in nearly five years, whilst Italy also tapped the markets with a new 7-year bond . U.S. stocks wobbled between small gains and losses in choppy trading, as optimism over Yellen’s Fed nomination was trumped by woes over the ongoing government shutdown. Yellen is widely perceived as being dovish on monetary policy and investors expect her to take a slower path towards a reduction in the Fed’s bond-buying program. The announcement on her nomination is scheduled for 3 p.m. ET (8 p.m. London time) on Wednesday. “With Janet Yellen, you’re likely to get a situation where the Fed pursues its ultra-loose monetary policy well beyond the current threshold of unemployment at 6.5 percent and ultimately pushes into higher inflation,” Gabriel Stein, chief executive of the Official Monetary and Financial Institutions Forum, told CNBC. (Read More: What would Yellen at the Fed mean for global finance? ) Global investor sentiment continued to be weighed down by rising concerns over a U.S. credit default with only nine days left for Congress to raise the debt limit before October 17.