Baku, Fineko/abc.az. Saxo Bank does not believe in long-term nature of the current downward trend in global financial markets.

Bank’s equity analyst Peter Garnry has stated that European stock markets opened in a minus under the influence of negative trends in the Asian session. The trend emerged in Friday’s trading in the U.S. against the backdrop of rising cost of Brent crude above $117 a barrel due to the escalation of conflicts in Libya. Futures on the FTSE 100 index lost 0.3% before the opening.

In the absence of significant economic reports the investors find it difficult to determine with direction. "Bulls" and "bears" are arguing about what basic factor is most important for the markets: the economic recovery and geopolitical risks and their possible implications for the global economy.

Most of the economic data published recently were very impressive. In particular, the growth rate of industrial activity and the situation in the labor markets in the world is gradually improving. Bears are counting on the deterioration of the tense situation in the Middle East and believe that the likelihood of serious failure in the energy markets is increasing. If oil production in Saudi Arabia disrupts, it can harm the world economy. If oil prices remain above $100 a barrel, it can also badly affect the already weak consumer demand that will also exacerbate the economic recovery.

"Nevertheless, I am of the opinion that the economy is recovering, and the fair value of shares in the long-term prospect is higher than current prices. Yet in the short-term prospect the markets are likely to adjust in response to the current geopolitical risks," Mr. Garnry said.

07.03.2011 15:33