Tuesday, August 28, 2007

Markets Fall Again

Markets have now again started showing signs of weakness with Dow Jones falling 280 points in yesterdays trading session with renewed fears of sub-prime mortgage defaults and bankruptcy among large hedge funds and financial institutions, also aiding the fall is low consumer confidence among U.S.consumers.
Asian stocks are also trading lower on the back of weak signals from U.S. markets. U.S.Fed now has to take several rate cuts this year so as to restore market and consumer confidence.
It seems worst hasn't come out from U.S.sub-prime mortage mess. And till then stocks will be hugely volatile. This credit crack can have potentially a drag on world economic growth which so far has been very good.
Uncertainty will prevail till then in the financial markets.
Buying in sharp falls in sectors and stocks with the strongest of business fundamentals will pay eventually. Yen is gaining strength against the dollar and is trading at 114 against it, it seems the yen carry trade un-winding is still underway and thus causing volatility in the financial system.