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Risk aversion scenario influences sugar drop - INTL FCStone Blog
International Assets Holding Corporation > INTL FCStone Blog > Posts > Risk aversion scenario influences sugar drop
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Risk aversion scenario influences sugar drop 3/16/2011 9:48 AM

Overall risk aversion in international financial market, with sharp drops in the world's stocks exchange and futures.

This long position selloff trend was influenced by earthquake and tsunami in Japan last Friday (11).

This natural phenomenon possible impacts on the world's third major economy, such as reduction in international commodity demand, influenced overall riskier assets selling movement.

Another explosion at Fukushima nuclear plant reactor boosted downward movement in the market and raised concerns regarding whether quotes will receive support and overall selling movement will stop.

Drops in market may be related to herd effect, once the more the assets depreciate the more fears regarding further drops increase, which may influence assets long position selling movement.

This does not mean problems caused by the earthquake and tsunami are not severe, but it indicates part of stocks exchange losses are related to market fears.

 

Brazil Planning, Resource and Special Projects Group