Painful First Quarter For World Financial Markets
This quarter started with huge concern about housing bubble bust adopted by subprime crises which all are speaking US economy towards a recession. This will likely be long or quick recession only time will inform but influence is getting seen in low client confidence and similar store sales reviews which are falling every month. US government and Federal Reserve is trying their best to tug economy out of this downturn by giving tax concessions and lending cash to banks at very low and deferred curiosity terms. Bear Stearns was biggest causality of this quarter whose inventory fell from $80 to $three in matter qatar petroleum refinery jobs vietnam of 5 days due to its losses in mortgage backed securities which received severely devalued as a result of subprime crisis.
Above all events resulted in one of the worst quarters for global inventory markets. Dow fell by 20% off its historic high of 14280 to about 11500 and took world markets with it on rollercoaster ride. German DAX fell from 8150 to 6200 a web valuation lack of 24%. Similarly Australian Inventory Market also took a dive with valuation depletion in neighborhood of 27%. Among all these markets Indian markets took highest hit the place benchmark index Nifty plunged 30% from its January highs of 6290 to 4448. Worst performing sector was banking which misplaced about 42% valuations. Also Nifty Junior and Nifty Midcap humbled by 45% and forty three%.
Crude oil costs elevate also contributed its part in slowdown worry in world markets. On this quarter crude per barrel increased from $89 to $a hundred and ten due to at least one or different events in world and stubbornness of OPEC international locations to increase oil manufacturing. Rapid industrial development in India and China is major underlying elementary factor in imbalance in demand and supply of crude oil. One thing optimistic is been seen from automotive sales report that small automobile gross sales are rapidly rising all thanks to their excellent gas efficiency as $3 a gallon is creating large hole in every ones pocket.
Food grains like wheat, Rice and pulses are displaying extremely bullish trend in world commodity markets. Thee yr long drought situations in Australia can be damping grain manufacturing from one of the biggest exported of wheat. In India because of lower than favorable monsoon and overzealous exports of rice have created shortfall in strategic grain reserves, which resulted in export ban of rice and pulses. This will further instigate value rise in world grain market in coming quarter or two. Governments across the globe need to give serious heed to develop higher yielding crops or image could be very grim for future availability for main meals staple like wheat and rice, which can badly hit countries in Africa and Asia.
Treasured metals like gold and silver has shown very wild swing this quarter as a result of continues fall in stock market and US Dollar worth. Treasured metals particularly gold is most well-liked funding to which people resort to in events of financial turbulence as we have noticed this quarter. Gold stared this quarter with $845 per ounce and reached its peak of 1030. On account of measures taken by government and fed to ease fear of recession gold fell by 26% in final two weeks touching low of $874 per ounce. Equally silver started this quarter at $14.80 per ounce and peaked at $21.30 and now back to $sixteen per ounce. We expect precious metals will keep its uptrend in coming quarters and this pullback can be utilized pretty much as good accumulation level.
To summarize the evaluation we expect that harm done to global economic system particularly stock markets in final quarter will keep showing its effects for 2 to 3 quarters and markets could see heavy volatility and wild swings. It is prudent in a part of traders and investors not to be over zealous in both bull or bear side of markets and keep a neutral view to commerce accordingly.
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