MEMBER'S LOGINX
| Invalid Username / Password | ||||||||
| Invalid Captcha | ||||||||
|
||||||||
| Sign Up | Forgot Password? | ||||||||
- Home
- Todays Market
- Indian Stock Market News March 15, 2011
Will the Japan quake shake the world? Tue, 15 Mar Pre-Open
The triple tragedy of the earthquake, tsunami and nuclear disaster in Japan has been so huge that the Prime Minister labeled it 'Japan's darkest time' since World War II. Then, the US had dropped two nuclear bombs on the cities of Hiroshima and Nagasaki after Japan had attacked Pearl Harbour. That incident alone changed the way the country was run, its politics and its dealings with other countries.
The recent natural disaster has been catastrophic as well. Besides the mounting death toll, Japan is desperately trying to deal with the overheating of its nuclear reactors which if unsuccessful can cause serious radiation leaks. The timing of this tragedy also makes it very hard for the world's third largest economy. The country is struggling to shake off the crippling effects of recession and the debt that it has accumulated. Plus, interest rates are at an all time low and although the immediate reaction after the crisis was to inject more liquidity into the system, one is not sure whether it will really work.
The question is to what extent this disaster will affect the dynamics of the global economy. In the near term, because of the power outage, production is expected to dip. So will consumption. As such, the cost of commodities, such as crude oil, iron ore, copper and the like, will drop over the next few days and potentially the next few weeks. That said, in the medium to long term, the scenario is likely to be different. For starters, Japan will have to undergo massive reconstruction and when that process begins to take place, the demand for commodities is sure to rise.
On the oil front, it will be quite some time before the nuclear power plants start functioning normally once again. Which means that Japan will have to go in for more oil imports. The country is already the third largest importer of oil after the US and China. And the damage to the nuclear power plants means that the demand for oil will rise further. This could then be another catalyst that will keep oil prices at higher levels.
There is also the increasing possibility of recession in Japan prolonging as an aftermath. Monetary policies are likelier to remain benign. Only time will tell whether the repercussions on the global economy will be worse or better than what was originally envisaged.
For information on how to pick stocks that have the potential to deliver big returns, download our special report now!
Read the latest Market Commentary
Indian Share Market Update: Top Gainers and Losers
ABOUT EQUITYMASTER
Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.
PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
- Multibagger Penny Stocks
- Basics of Value Investing
- Benjamin Graham
- How to Invest in Gold
- How to Invest in Silver
- Best Stocks to Buy Today
- Best Small-cap Stocks to Buy
- Best Bluechip Stocks to Buy
- Guide to Penny Stocks
- How to Invest in the Share Market
- Warren Buffett - The Value Investor
- Pick the Best Multibagger Stocks
TRENDING TOPICS
Copyright © Equitymaster Agora Research Private Limited.
Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap
Equitymaster Agora Research Private Limited (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407
Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com
LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.
Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
Equitymaster requests your view! Post a comment on "Will the Japan quake shake the world?". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!