Send to a friend

News

Stock market woes highlight property growth - 28 February 2007

Across the globe, stock markets have been slipping for the second day in a row, amid fears that there could be what is euphemistically being referred to a ‘correction’ across the world’s major markets. This highlights the volatility of the stock markets, and the relative stability of investing in the property market.

The UK FTSE 100 index shed 1.9 per cent of its value on Tuesday, taking its total losses this week to 4 per cent, or around £65 billion. France’s CAC 40 lost 1.5 per cent, and the Dax in Germany dropped by 1.9 per cent. Markets in Asia, Australia and India suffered similar losses.

The two big Asian markets – Japan’s Nikkei and the Hang Seng in Hong Kong closed down 2.9 per cent and 2.5 per cent respectively.

The question for most investors is really how long and how far this ‘correction’ will continue, or indeed whether this is a signal of a general market slowdown. Industry analysts have said that some form of correction was expected, though the timing and severity has surprised some watchers. On the BBC website, Angus Campbell from Finspreads said, “This sort of move by the market is a little worrying, and it looks like it has been caused by a build-up of concerns in recent days.”

It is understood that the markets have concerns over the US and Chinese economies – the twin drivers of global economic growth – and possible US strikes against Iran. China’s hugely overheated stock market dropped by 9% in Tuesday trading, the biggest fall in over a decade.

Worries amongst traders and investors alike that the current falls in the markets are the beginnings of a bear market have seen large-scale selling, and although there was some rebound on Wednesday morning, this was nowhere near enough to recover the losses of the previous two days.

At the same time, prices in the housing market have continued their steady rise, even despite the recent rises in the interest rate in the UK making borrowing more costly. And this trend appears to be continuing in the UK and overseas. A report today from the Egyptian Tourism Authority has predicted that property purchases are set to double in 2007, with prices rising by up to 20 per cent per year for the next three years.

 

Related Articles


Browse our articles written by leading industry experts:

Overseas Property Buying Guides

UK Property Guides

Gardens and Interiors

Cosmetic Surgery Fact Sheets

Looking Good Guides

Money

Business

Community

Travel