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After rapid growth in the third quarter, stock markets seem to need correction

Oct 1st, 2009 | By admin | Category: News International Markets

Expectations about the prospects for reviving the global economy is not so unambiguous on the background of very weak statistics, coming from the U.S. and Japan. The activity of private capital is not high enough to fully replace public support programs, posing a threat was evidence of economic growth. This uncertainty led investors away from risky assets, fixing the profit, the more they have something fiksiroat: the dynamics of stock indices in the third quarter was the best for the last 11 years.

Trades in U.S. trading session differed highly volatile: the rapid collapse in the beginning of the session provoked by the release of weak makrostatistiki was partly offset by growth at the end of the session. As a result, the Dow lost 0.31% and dropped to Section 9712.28, the index SP - 0,33% and fell to 1,057.08 p.

The main negative on the market yielded data on industrial activity and employment report from ADP. Chicago PMI index unexpectedly collapsed to Section 46.1 of the August values at 50 on, despite the fact that the market expected to continue recovery in the manufacturing sector and the expected growth rate to 51 n. Thus, the September data indicate the potential for failure in the production of that can slow down output of American industry from the crisis.

Statistics on employment in the private sector from ADP also presented a nasty surprise: contrary to expectations, the number of jobs declined in September, more significantly - by 254 thousand, against the projected 240 thousand in anticipation of the publication of official statistics on the labor market, weak ADP Report could increase the pressure on stock indices.

In general, after a rapid growth in the third quarter, stock markets seem to need correction, which would remove tensions and fears are overbought. However, is not far off the beginning of the season for corporate reporting, which may give new momentum to growth, if, of course the market, as is the case with economic expectations will not be overly optimistic.

Leading Asian indexes also reduced in the course of today's trading. One of the main reasons was the issuance of the report of the Bank of Japan, which implies that corporations are planning to further cutting the cost of investment, thus jeopardizing the restoration of the second-largest economy in the world. MSCI Asia Index fell by 1,2%.

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