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All global stock markets decline, reinforced by the global Liquidity and Credit crisis.

Posted by Adrian on January 22, 2008

All major stock indices are being sold off, as investors leave financial stocks, industry and pretty much any company that may have debt, refinance issues or just a general fear of the credit and liquidity crisis spreading further into the manufacturing sector. Combined with a recession in America, which in all reports, will be a severe one, the banks contracting to stay liquid; which may end up becoming illiquid – a major problem as that could cause the money exchange or global interbank markets too decline rapidly.

refer to close of trading (21st Jan 2008) for the FTSE 100, DAX, CAc40 – Nasdaq, and Dow Jones closed for trading (Martin Luther King birthday)

FTSE 100

3bbc-narrow_thick-lineintraday.png
DAX

1bbc-thumbnail_thick-lineintraday.png

Cac 40
18bbc-thumbnail_thick-lineintraday.png

Also refer to the commodity export markets, that if the decoupling theory (countries avoiding a recession spillover from America) was correct, would stay somewhat resilient in market turmoil. The main commodity (resource) market players that export to China, are Argentina, Brazil and Australia. According to reports from the Wall Street Journal reports Bank of China “may have to write off a fourth of the nearly $8 billion it holds in securities backed by U.S. subprime mortgages”, linked to the US subprime market.

A concern would be that not only would China slow down, although may not become recession base, the stock market could tumble from fear selling. With connections that the Chinese financial market could be deeply effected by global credit and liquidity crisis.

refer to graph for the Brazilian BVSP index (3mths) close of trading 21st Jan 2008, down 3797.29 points (6.60%):

_bvsp.png

refer to the Argentinian Merval index (3mths) close of trading 21st Jan 2008, down 125.59 points (6.27%):

_merv.png

The Australian AORD index (now trading), currently at:

Index Value: 5,331.000
Trade Time: 11:59AM AEST
Change: Down 299.900 (5.33%)
Prev Close: 5,630.900
Open: 5,630.900
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One Response to “All global stock markets decline, reinforced by the global Liquidity and Credit crisis.”

  1. […] All global stock markets decline, reinforced by the global Liquidity and Credit crisis. […]

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