Wednesday, March 16, 2011
Stock market hurt by nuclear power situattion in Japan
Due to worry about the nuclear crisis in Japan stock markets in the United States and Europe ended lower on Wednesday. Markets had been calmer when it comes to early trading but the markets became scared after the European Union energy commissioner Gunther Oettinger doomed the situation as out of control and said that catastrophic could happen in the following hours. The central bank of Japan has been continuously pumping liquidity into the economy and representatives of countries such as France have hinted that they might be providing Japan with Financial assistance. Some Japanese industries such as the automobile industry have managed to recover some of its losses.
Subscribe to:
Post Comments (Atom)
2 comments:
I think it's interesting that the article mentions that the "risks to the world economy seem to be multiplying". The risks have always been there, hidden under the surface. The European sovereign debt crisis could was foreseen by many. So was the collapse of the housing market and multiple banks in the United States. Just because the risks are not playing out and taking place does not mean that the risk is not always there. With a globalized economy, it is even more risky. As we see here, the tragedy in Japan has effected many other far-away countries due to the interlinking economies. It's important that investors and stock market participants realize these risks and open about them.
It will be really interesting to see how companies with overseas production in Japan will handle the situation. It seems that whether the stay in Japan or whether they move production facilities, it will be a costly transition. The crisis has had a global impact because so much production takes place in Japan, and inevitably we could have expected stock markets to end lower.
Post a Comment