Monday, January 21, 2008

Blood on the street.

Major stock market benchmark Europe's Stoxx 600 index declined 20% since its 6 and half year high on June 1. This is clear definition of beginning of bear market. European shares entered bear market first time since 2003 due to fear that losses from financial sector and economic recession in US will halt profit growth in Europe. Even though ECB declared that will not follow FED interest rate decision many analysts are now expecting two rates cut within 2008 in Euro zone. Today in Europe we see blood on the street. Look at main stocks benchmark.Main laggard DAX30 touched -7%, CAC40 -5%, FTSE 100 -5%. Emerging markets in Europe don't look better as well. New statistics are coming every day. Last week was the worst in 5 years. FTSE 100faces the worst start to year since 1935. It is hard to say what could ease current drop and shaped at least short term bottom. Friday's trading in US showed us that not even good earnings results from IBM (IBM) and General Electric (GE) were able to stop selling. FED rate decision meeting is on 30. January.


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