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Tuesday, March 11, 2003

Multi Year Lows All round

The equity market carnage continues, with no apparent respite in sight. If this continues any length of time watch out for the German banks and other financial institutions:

World markets took fright on Monday as investors realised that the countdown to a war in Iraq had begun. European equities tumbled to levels not seen since the mid-1990s and bond yields slipped to their lowest point for 50 years as investors sought the haven of government debt.Wall Street was under pressure on the third anniversary of the Nasdaq composite’s peak during the dotcom boom. The Nasdaq market has lost 75 per cent of its value since the internet bubble days and closed 2 per cent lower on Monday.

The Dow Jones Industrial Average closed down 2.2 per cent to a five-month low. While war fears are driving the market lower, investors are also concerned about the prospects for economic growth and poor US unemployment figures last week continue to weigh on sentiment. Economic concerns put pressure on the dollar, which was close to a four-year low against the euro. Oil prices continued their recent rise, with April Brent crude at its highest point since the 1991 Gulf war - $34.33 a barrel. Oil futures on Nymex reached $38 a barrel. In Japan, the Nikkei 225 average fell to its lowest point for 20 years as the yen strengthened to a six-month high of Y116 to the dollar. Japanese retail investors have been buying precious metals as a haven and on Monday pushed the platinum price to a 23-year high of $707 per ounce.Two-year German government bond yields fell to a record low of 2.2 per cent and two-year US Treasury yields again touched the record lows set last week of 1.36 per cent. In global equity markets, investors either sat on their hands or piled into bonds. London’s FTSE100 index fell to 3,436 its lowest level since June 1995. Germany’s Dax index fell to a seven-year low as record losses by Deutsche Telekom forced the market down further.
Source: Financial Times

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