The sell off in the markets was short lived as the major stock indices recorded heavyweight gains yesterday. The change in sentiment was triggered by news from the Ukraine President Vladimir Putin ordered troops back to base after the completion of military exercises.
Putin also held a press conference at which he appeared to give reassurance that he was determined to avoid military conflict. The event at his Novo-Ogaryovo residence, he said there was no need for Russian military action in Ukraine, which would happen only in an “extreme case” but he made it clear that he believed that Ukraine had witnessed an “unconstitutional seizure of power” by western-backed extremists, some of them wearing “armbands with swastikas”.
He said, the need for actual use of force in Crimea had “dissipated and “I believe that it will not be necessary for us to do anything like that in eastern Ukraine.” But there were warnings that Russia might not recognise the results of Ukraine’s presidential election due to be held in mid-May.
With war in the Crimea seemingly off the table for now the U.S. indices had their best day since mid December with the S&P 500 index bouncing back 1.5%, to 1,874 at the close, the Dow Jones Industrial Average adding 228 points, or 1.4%, to 16,396. The Russell 2000 index of small caps closed at a record high, gaining 2.8% to 1,209. The FTSE 100 rose 1.7% or 115 points to 6,824.
After all the focus in Europe over the last few days, there was news from China overnight from the start of annual meeting of its legislature, the National People’s Congress. Premier Li Keqiang said the government would keep its growth target of 7.5% in 2014 following the 7.6% achieved last year, with the consumer inflation target set at 3.5%.
With the 7.5% GDP growth target there are concerns given the economy appears to be quite weak right now with significant over capacity and the government will be forced to spend even more on giant infrastructure projects, exacerbating the pollution problems even more. Many have been calling for more action from the Chinese leadership to tackle excessive debt and particularly the shadow banking system whilst rebalancing the economy to consumption driven growth.
Contrarian Investor UK
IMPORTANT: The posts I make are in no way meant as investment suggestions or recommendations to any visitors to the site. They are simply my views, personal reflections and analysis on the markets. Anyone who wishes to spread bet or buy stocks should rely on their own due diligence and common sense before placing any spread trade.
by contrarianuk
Tensions in Ukraine quickly forgotten by investors as Putin seemingly soothes fears of war
Mar 5, 2014 at 6:44 am in Market Commentary by contrarianuk
The sell off in the markets was short lived as the major stock indices recorded heavyweight gains yesterday. The change in sentiment was triggered by news from the Ukraine President Vladimir Putin ordered troops back to base after the completion of military exercises.
Putin also held a press conference at which he appeared to give reassurance that he was determined to avoid military conflict. The event at his Novo-Ogaryovo residence, he said there was no need for Russian military action in Ukraine, which would happen only in an “extreme case” but he made it clear that he believed that Ukraine had witnessed an “unconstitutional seizure of power” by western-backed extremists, some of them wearing “armbands with swastikas”.
He said, the need for actual use of force in Crimea had “dissipated and “I believe that it will not be necessary for us to do anything like that in eastern Ukraine.” But there were warnings that Russia might not recognise the results of Ukraine’s presidential election due to be held in mid-May.
With war in the Crimea seemingly off the table for now the U.S. indices had their best day since mid December with the S&P 500 index bouncing back 1.5%, to 1,874 at the close, the Dow Jones Industrial Average adding 228 points, or 1.4%, to 16,396. The Russell 2000 index of small caps closed at a record high, gaining 2.8% to 1,209. The FTSE 100 rose 1.7% or 115 points to 6,824.
After all the focus in Europe over the last few days, there was news from China overnight from the start of annual meeting of its legislature, the National People’s Congress. Premier Li Keqiang said the government would keep its growth target of 7.5% in 2014 following the 7.6% achieved last year, with the consumer inflation target set at 3.5%.
With the 7.5% GDP growth target there are concerns given the economy appears to be quite weak right now with significant over capacity and the government will be forced to spend even more on giant infrastructure projects, exacerbating the pollution problems even more. Many have been calling for more action from the Chinese leadership to tackle excessive debt and particularly the shadow banking system whilst rebalancing the economy to consumption driven growth.
Contrarian Investor UK
IMPORTANT: The posts I make are in no way meant as investment suggestions or recommendations to any visitors to the site. They are simply my views, personal reflections and analysis on the markets. Anyone who wishes to spread bet or buy stocks should rely on their own due diligence and common sense before placing any spread trade.