Markets are calming after attack of Chinese frenzy
The world’s stock markets were quieter on Wednesday in the wake of last week’s massive sell-off in the saving and investment community, sparked by regulatory fears surrounding the Shanghai index and the outlook for the US economy.
The German and French exchanges – particularly badly hit by bearish sentiment – rose back to accustomed levels.
London steadied after a poor start to finish the trading day ahead on the numbers, and with saving and investment sentiment said to be “much calmer”.
Many City observers agree that the worst is now over and that sound fundamentals, especially healthy corporate earnings and a benign economy, will buoy the market for the foreseeable future.
But some analysts sounded a note of caution. “People keep saying that everything in the garden is rosy,” said a senior trader at one City of London investment house.
“Yet there are persistent anxieties about the health of the US economy troubling the saving and investment community at the moment.
“The prospect of a soft landing for the US economy have been dented somewhat by the reality of the situation, particularly the high default rate on mortgages there, which many of the banks are making provision for in their balance sheets.”