18.07.2014 - The market is experiencing negative mood of investors
Stock markets in the U.S. closed with a significant reduction due to the introduction of the next stage of sanctions against Russia in connection with the annexation of the Crimea and the support of separatists in eastern Ukraine. Sanctions affected financial, defense and energy sectors of Russia's economy. An additional factor that contributed to the fall has became negative data on the housing market, where the number of housing starts in June fell to 0.89 million compared with an expected 1.02 million the mood of investors deteriorated after message that over Ukraine was shot down passenger aircraft and the death of 298 people that leads to the deterioration of relations between the West and Russia. We maintain our negative medium-term outlook for the U.S. market.
European stocks declined yesterday on the background of new sanctions against Russia by the U.S. and EU, which have a negative impact on the EU economy. Data on inflation in the euro area coincided with the analysts' forecasts and the consumer price index in June remained at 0.5%. Investors were also disappointed by weak data on the U.S. housing market. Today European stock markets will likely continue to fall after news that over Ukraine was shot down the Malaysian airliner. According to experts the cause of the fall was a missile fired by militants in eastern Ukraine. In the medium term, the markets will likely continue to fall.
Most markets in the Asia-Pacific region showed a negative trend on the background of global negative sentiment associated with the beginning of the ground operation in Gaza, with new sanctions against Russia and the fall of the Malaysian airliner in Ukraine. Moreover in China, announced about the fall in house prices in 55 of the 70 largest cities in the country that continues to put pressure on the Chinese market. Strengthening of the yen resulted in sales on the Japanese stock market and the Australian index was supported by gold prices rise. We maintain a medium-term negative outlook for the Australian and Chinese markets, but expect continued growth in the Japanese index, in case of devaluation of the yen.