Hurricane Sandy Casts Shadow Over Markets

MONDAY MARKET UPDATE: Hurricane concerns and market closures result in low trading volumes in the UK and Europe

Alanna Petroff 29 October, 2012 | 6:34PM Rouhan Sharma

The winds of Hurricane Sandy are being felt by investors around the world. Global markets are in batten-down-the-hatches mode, with investors waiting to see what damages the storm will bring.

US markets have ground to a halt, with Monday’s market closure now being extended into Tuesday. As a result, trading volumes across the UK and Europe were significantly lower on Monday.

Hurricane Sandy has cast a shadow over European markets as well as the US Eastern coast

The NYSE Euronext announced it would remain closed on Tuesday, saying the move was made “in coordination with all US equities, bonds, options and derivatives markets.” The NYSE said in a written statement: “We intend to re-open our US markets on Wednesday, October 31, 2012, conditions permitting.”

“Hurricane Sandy has cast a shadow over European markets as well as the US Eastern coast, as fears over the ramifications [are] being analysed,” said Alastair McCaig, a market analyst at IG. “Several US companies, including Pfizer (PFE), postponed quarterly reports until after the storm has passed.“

In terms of sector-specific concerns, “European insurance companies could … be deeply affected depending on the severity of Hurricane Sandy,” said McCaig.

By the close of the trading day in London, shares in the insurers Admiral Group (ADM), Old Mutual (OML) and Legal & General Group (LGEN) had all fallen by 1-2%.

With many investors sitting on their hands and waiting for the storm to pass, the overall UK markets were relatively flat by the close of the trading day. The FTSE 100 index dipped by 12 points, or 0.2%, to close at 5,795. The FTSE 250 index edged down by 5 points, closing at 11,921.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.

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