Economy

News and updates on the Australian economy and world markets that impact on the Australian economy.

Australian Market Wrap #321 - DOUG GRANT, BELL POTTER

Mortgage One - Monday, September 26, 2011

The market is still reacting to the eurozone crisis. IMF annual meeting over the actual weekend, and comments by both Timothy Geithner, the US Treasury secretary, that if the eurozone didn't act, there was going to be a cascade of defaults, and Larry Summers, who was Obama's chief financial adviser, comments that this is the gravest he has seen for 20 years.

 

The resources sector was at the forefront of the selling since Thursday, and today, we saw no let-up whatsoever, and in fact most MCAP over resources were down anywhere between 8% to 15%.

In part this selling has come about since the FOMC which has raised concern by stating that there were further risks to the economy.

The gold sector has seen a big drop primarily driven by people actually liquidating their positions and speculators being forced out. It appears that for these people who are actually liquidating their positions it's more than likely to pay for losses elsewhere within their portfolio.

In company news, Arrow Energy has upped its bid for Bow Energy which has been recommended by the Bow board. The deal now needs a large major player to take it to the actual next level and Arrow feels that they can get a 15% uplift in production.





 



 


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