Market Reaction after Osama bin Laden's death may 2 2011
6:07 AM
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oil prices forecast, gold prices, silver price, dollar reation, market ccommodities reaction : Osama bin Laden's death boosted the Australian share market in afternoon trade, but not enough to offset the effect of the strong local currency and a sharp fall in the silver futures price. At 1613 AEST, the benchmark S&P/ASX200 index was 2.1 points higher at 4825.3, while the broader All Ordinaries index was 2.8 points lower at 4896.2.
On the ASX 24, the June share price index futures contract was 19 points higher at 4827, with 40,258 contracts traded.
Osama bin Laden Dead: Stocks Higher, Oil and Gold Drop
Nearly 10 years after the 9-11 attacks, US forces killed Osama bin Laden, the mastermind of the largest the terrorist attacks in US history. Last night, President Obama said that “justice has been done,” after the leader of al Qaeda was killed in a firefight in Pakistan.
The market reaction was almost immediate: stocks and the US dollar higher, commodities lower. With a little bit of sleep, investors are likely to conclude that while this news is indeed a great shot in the arm of the national psyche, it should have little long-term impact on the economy and financial assets.
Let’s start with the numbers: European and Asian stock markets hit two-month highs, though volume was light due to holidays in UK, China, Hong Kong, Singapore, Malaysia and Thailand. Tokyo’s Nikkei average was up 1.6 percent and closed above the key 10,000 level for the first time since March 11 - the day of the devastating earthquake and tsunami.
US stock futures are up approximately 0.6 percent the US dollar is firming after a nine-day slide that left the greenback at the lowest level in three years. Commodities markets tumbled, with oil down over 2 percent and gold dropping 0.7 percent. The big loser was silver, which plunged as much as 13 percent and is currently off 6.5 percent, due to new exchange rules limiting speculative positions.
Why are markets moving at all? Osama bin Laden didn’t control a massive oil field and his death will not change corporate earnings, speed up economic growth, help the housing market or stop gas prices from rising. But investors are human beings, who are often guided by their emotions. Today we feel better - perhaps even optimistic - and as a result, we might feel a little more confident about putting our investment dollars at risk....read more
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