By: Mike Campbell
In early trading yesterday, the world’s major stock indices put on a little value, but by the close, all except for the Nikkei 225 were in negative territory. The Japanese index managed to hold onto its gains, closing up by 0.36% at 10530. The FTSE 100 was down by 1.85% with the other major markets down by nearly 2%. The Dax fell by a larger margin, closing at 5326 down by 2.6% on the day. The declines in world markets were ascribed to the belief that stocks had been overbought recently and that the recent, more promising, economic data had already been factored into their value.
In the USA, Ford reported that their profits were up 17% year-on-year for August, but this disappointed analysts who had looked towards an increase of a third or more on the previous year with sales impetus coming from the Government’s “Cash for Clunkers” campaign.
The weakness in the stock market bled through to the commodities with the price of crude oil dropping to 68.05$ a barrel; a 2.7% fall on the day (following on from an earlier 2% session gain). As a result, the dollar has dropped slightly against the all of the major currencies: Japanese Yen (92.7), Euro (0.703) and Pound Sterling (0.619). Sterling and the Euro showed slight gains against the Yen, trading at 151.17 and 133.26, respectively.
Early today, a car bomb exploded outside the Athens Stock Exchange injuring one person. A warning was given, but the building suffered significant damage. The authorities believe that the attack was the work of a “domestic” terrorist group, Revolutionary Struggle. The group targets economic and political targets. Despite the attack, the Athens stock exchange opened for business as usual. Greece is a member of the Eurozone economies.