World Stock Markets Lose $2 Trillion in a Month
The month-long ongoing fall in world stock markets has caused $2 trillion in wealth to vanish.
This situation has left investors with only a few alternatives apart from the bond and currency markets.
Turkish State Minister Ali Babacan announced the regression that took place at Istanbul Stock Exchange (ISE) between May 10 and June 13 Tuesday evening due to the latest global developments is 25.7 percent.
The companies’ market value in ISE fell by $73 billion in the same period. The market value of $186 billion on May 9 regressed to $113 billion, with a loss of 39 percent.
Investors are leaving the stock markets and commodities such as gold and oil in fear that interest rates may rise and inflation may negatively affect economic growth.
“It is essentially one consistent story worldwide, starting here in the U.S. There is a fear that the Fed's repeated commitment to limiting inflation demonstrates a willingness to risk economic activity,” FTN Financial New York Chief Economist Christopher Low said.
Stock markets suffered losses following the decision taken by the United States Central Bank to increase interest rates on May 10 for the sixteenth time; a move proceeded by further statements of interest rate increases.
Investors were, however, expecting to see signals of an end to this tightening policy.
Markets across the globe have since been experiencing a tough period, and strategists find it difficult to ascertain how much longer the markets will be able to sustain the sell offs or how long the activity will continue.
The fluctuations across world markets is the result the United States Central Bank decision to increase interest rates and by hints of a continuation of such increases, said State Minister Ali Babacan.
In addition to the foreign influence, recent domestic developments may also have played a significant role in leading to the chaos in the Turkish markets, said Babacan, but stressed, the existence of the government’s economic program will ensure maintenance of the fundamental economic balance.