+

Cookies on the Business Insider India website

Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.

Close
HomeQuizzoneWhatsappShare Flash Reads
 

The Market Is Flashing Signs Of 'Deep Instability'

Apr 17, 2013, 16:47 IST

TinyTall / FlickrThe big market story this morning is the selloff in Germany, which happened in a flash, and without an obvious explanation.

Advertisement

Sebastien Galy of SocGen sees this as a sign of rising jitters and instability.

It took only some speculation of a German downgrade to send the DAX plunging sharply lower, before it partially recovered. The sensitivity of different markets to negative surprises seems to have risen sharply recently, particularly in Europe and the broad EM spectrum. It suggests that the period of consolidation is continuing. Until now, sharp corrections were met by sharp recoveries as they were in 2006 and 2007 typical of liquidity fuelled rallies. This is the second period of deep instability this year, the last one was end of February (“instability cubed”).

Yesterday, Galy's SocGen colleague Kit Juckes noted that a lot of clients were wondering whether what happened to gold in recent days could happen to stocks.

Markets are on knife's edge.

Advertisement

You are subscribed to notifications!
Looks like you've blocked notifications!
Next Article