Low commodity prices and falling share prices on US markets were pushing Russian indexes to there lowest October levels says Pavel Emelyantsev analyst at InvestCafe.
“Brent lost over 1.5% during Monday trading nevertheless later the prices managed to turn upward and gain back 1/3 of the trading loss. By the end of the day Brent was trading at around $106. MICEX closed in negative with index down by 4.8% to 1390 pp, to compare S&P500 slide by 2.1%.”
News from US disappointed investors when the US Government failed to announce plan to cut $1.2 trillion of budget deficit in the next 10 years.
Eduard Badaev analyst from BCS says investors were trading in fears securing their positions “in the short run rather than in long, such massive sell-offs on the market lead to diving indexes.”
Badaev added that the negativity came after "US Government failed to make headway on the budget deficit. Above all, EU sovereign debt problems continue to put pressure on investors signalling an inevitable default by the Union.”
Pavel Emelyantsev says one of the major concerns of investors anxiety was the news from the strongest EU economies. “Germany voted against the idea of common Eurobond issue from the European Commission. If there will be a shortage of liquidity –the default will certainly happen.” Another highly rated economy- France, have been warned by Moody’s on a negative rating review “since yields of French state bonds are climbing further up signalling too much of unsecured liabilities”
Today markets opened in positive range with oil also up trading around $107 per barrel. It’s expected to stabilize around this figure on the back of good news from Europe. The Euro zone Finance Ministers agreed to give the next tranche of financial aid to Greece. Ultimately, a bunch of statistics from US is likely to batter global markets during the trading session.