On Monday, world stock markets dropped, as investors’ changed their focus from strong economic growth in the United States economy during the 3rd quarter of the year to the depressed state of corporate earnings across the world. However, due to the Hurricane Sandy, analysts and experts expected stock markets to perform lower and overall activity to remain low as well.
Asian markets remained lower on Monday while the FTSE Eurofirst 300 index, which comprises of the top shares in Europe, also declined by 0.2 percent, settling at a value of 1095,39. On the other hand, DAX index of Frankfurt also opened lower while London’s FTSE 100 and Paris’s CAC-40 index also followed the same routine.
Regulators were pushed to close stock/options trading on the Wall Street as the Hurricane Sandy approached closer, weighing on the U.S East Coast.
Moreover, traders expressed that their focus is on the bilateral talks due to take place between Mariano Rajoy, Spain’s Prime Minister and Mario Monti, his Italian counterpart. Spain is one of the heavily indebted countries in the Euro Zone and faces constant pressure to accept a bailout package to avoid debt default.
According to Richard Griffiths, associate director at Berkeley Futures, the focus still remains on Spain. He also said that stock markets have reacted to investors’ focus on Spain and the mixed overall results posted by different European companies. Richard has also predicted that European equities will not be able to do so well this entire week.
On the other hand, Brent crude also dropped by $1.04, settling at a value of $108.51, as the United States markets ready themselves for the effects of Hurricane Sandy. Moreover, the euro also dropped, settling at $1.2890. Moreover, the US dollar regained a bit of momentum against the Japanese yen, settling at 79.63 yen. On Friday, the dollar had climbed to a four month high value of 80.38 yen.
Due to high uncertainty, markets are showing mixed results. According to Barratt Bulletin’s chief executive of commodity research, Jonathan Barratt, there isn’t much positivity to look at right now. Jonathan also said that they wanted US corporate earnings to show more solidity and be more robust than they turned out to be in the 3rd quarter of the year.
