Share Prices Trade Down Again After New Mortgage Fears
August 1, 2007
Trading indexed across the world have again fallen sharply today, after news of additional mortgage troubles in the rocky US housing market were announced today.
The news came alongside rapidly increasing mortgage defaults with one of America’s largest mortgage lenders, and substantial losses experienced by private equity funds in Australia.
Stock markets have seen very inconsistent trading over recent weeks, with threats from tightening global economies and problems with the US market affecting share sales on all major markets.
European stock markets have fallen dramatically, with the FTSE in London losing in excess of 100 points.
Meanwhile, Asian markets directly reflected the problems in the US and Australia by shedding a substantial portion of their value over the course of trading.
Trading on Wall Street has today shown some brief spells of recovery, but overall movements look to be in keeping with the overall trend of a lack of confidence and prudence in investment.
Analysts have suggested that until the US sub-prime lending crisis is fully uncovered and dealt with, volatility in markets will continue as present, given the widespread impact of the current situation on mortgage lenders and banks.
Additionally, the impact of closing economies worldwide and rising interest rates could be having an effect on traders’ propensity to buy, with growing uncertainty as to the health of economies in Europe and Asia.
Both the Cac and the Dax in central Europe fell substantially, as did the Nikkei in Japan, the Hang Seng in Hong Kong and the Kopsi in Korea, reflecting the worldwide impact of the American crisis.
Additionally, with the growing threat in Eastern Asia from inflation and overheating, markets there have begun to exercise caution in trading, which is only further aggravated by the ongoing US housing crisis in the sub-prime lending market.