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Mercantile Exchange Blog |
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Sep 26 2012 |
| Stimulus & Asian Stock Prices: A negative correlation! |
Investors and securities market analysts from U.S, Asia and Europe fear that the stimulus measures in developed economies may not at all support global economic growth. Some of the major exchange-traded companies from all around the world including BHP Billiton Ltd. and Berkshire Hathaway Inc. tumbled at exchanges amid stimulus concerns. Investors are “finally realizing that recently announced liquidity injections from central banks will do nothing to address the structural issues,” opined Matthew Sherwood, a market researcher at a Sydney based investment company.
With indexes from Hong Kong, South Korea, China losing their points, the Asian benchmark trading is falling short of expectations. Market analysts from U.S fear that new bond buying package announced by Fed probably is not going to boost economic growth or solve ongoing unemployment concerns, instead endanger the central’s bank’s credibility at national and international arena.
With China’s Central Banks liquidity injection into the economy via reverse-repurchase agreement equivalent to 290 billion Yuan, the financial market in the country is expected to get some relief concerning liquidity issues in the system. Amidst china’s economic slowdown and Euro zone crisis, the Asian indexes (mainly in China) are severely getting affected with the continued trade issues and future economic outlook of the Asian and European economies.
Economists and market analysts argue that both current and intended Asian, European and American monetary stimulus ought to boost economic activities in these regimes increasing level investment, industrialization, employment opportunities and eventually improve the overall national and cross-country economic position of each of the nations. On the one side, where some are optimistic over the stimulus measures, other do not take it that way and project the pessimist picture of world economies off the measures. |
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| Posted by at 11:51:33 AM |
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