Online Investment News

Beyond technology, the blue chip indices of the world have also suffered.

The UK’s FTSE 100 index, for example, remains unable to break free of the 6000 to 6900 trading range it has languished in all year. Investors, both private and institutional, remain depressed by high oil prices, which are unlikely to fall while the Middle East remains politically unstable.

Online Investment News - Interest Rates

September inflation figures in the UK appear to have been affected by the high price of crude. The Bank of England’s Monetary Policy Committee may raise interest rates to counter this trend, which will have a knock on effect on the equity market. Another cloud on the horizon is the continued weakness of the euro which has precipitated a flight to sterling, driving up its value and making life harder for the UK’s exporters.

Online Investment News - Offshore Investing

The US remains the economy the world is watching. An early winter cold snap in North America has done no favours to those who rely on an imminent drop in the price of oil. But the International Monetary Fund in its latest World Economic Outlook report forecasts US private sector investment at 18.5 per cent of gross domestic product, up from 15.5 per cent of GDP five years ago. This implies retail investors across the water are not exactly afraid of the markets in spite of the recent turmoil.

But the report was compiled before the mini oil shock of 2000 was priced into markets or had a chance to affect the economy. The US markets, already pummelled by the technology sell off, may soon be hurt by a flight of capital if private investors decide the US economy is not recession proof after all.

Online Investment News - European Investing

In Europe, meanwhile, inflation has also reared its ugly head as a result of the weak single currency and the high oil price. The European Central Bank raised interest rates late in the summer, but when its chief executive Wim Duisenberg hinted there would be no further intervention to prop up the euro, it went into another freefall.

The factors which have caused the western markets to drop in recent weeks may lead to a renaissance in the emerging markets.

Russia in particular has performed well and investors are being enticed back to the market widely perceived as a basket case at the time of the 1998 debt default.

The high price of crude has boosted the country’s oil dependent economy and fund managers are looking seriously at Russian energy stocks. Meanwhile, political instability, the cause of previous Russian equity collapses, appears to have been removed from the picture.

Although the standing of Vladimir Putin looked precarious in the weeks after the Kursk submarine disaster, the bad old days of Boris Yeltsin and his many prime ministers are long gone.

Likewise the commodity-based economies of Latin America are attracting interest from investors. In Asia, however, markets look shaky as the technology sell off impacts on results in Taiwan and Korea.