How Stock Market Investing Depends On Sentiment
Those who learn stock market behavior are aware that stock market is controlled by trends and hope more than substance
. An ample evidence for this fact could be seen during the latter part of the last week when stock market indices in both European and Asian countries soared to new heights. The reason was the news that French and German leaders were scheduled to meet on the 5th. They were scheduled to discuss ways to develop Closer Corporation among the 17 countries that use common currency of Euro.While the German Chancellor wants stricter rules imposed on the members, French president wants to get it done through close corporation among the governments of the 17 countries. People who try to take decisions on how to buy stocks need to consider on coming events on world affairs also. The upward movement of the share prices was due to the belief that the French President and the German Chancellor will come up with an agreement to enforce stricter regulations on budgetary controls. Also analysts believe that more emergency aid will be provided by European Central Bank.
These sentiments have an important impact on the stock market investing done by most investors. Since more money is pumped to the ailing economies, there is a likelihood of them rejuvenating. This is the sentiment on which the stock market indices regained ground. Also they believe the meeting of the leaders of two most powerful European economies will bring an outcome that will be favorable for the ailing economies. In order to do so, the two giants had to iron out some differences they had between them. However, the outcome is not yet known.
It was Italian stock exchange that gained most and it occurred just a day after the Italian Prime Minister has agreed on the austerity measures to be enforced in order to bring the country back on track economically. Italy is one of the worst affected countries on the recent wave of economic problems. In order to learn Stock market trends in Italy, it is enough to find that FTSC MIB gained 2.2%. This is also a gain that occurred due to the positive sentiments the investors show on the Italian economy. Italian Prime Minister was scheduled to explain the bill that is going to save $27 billion dollars to the parliament on Monday.
Italy in its austerity measures will tax luxury goods and property. Also they will pay incentives to factories that employ women. The age when pensioners are able to draw pension will be increased. Even bond markets saw that pressure on Italy is easing out. One problem Italy faces is that it is the third largest economy in the Euro zone. Due to this reason, it has become difficult to bail out its economy. This is why the country has to find its own solutions. Italy takes loans at 7% interest at the moment. This is the rate that almost collapsed the economies of Greece, Ireland and Portugal. When people do stock market investing these become food for thought.
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