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Is G20 needed to stop market mayhem?

Friday, February 12, 2016 - 01:43

Positive results from Commerzbank buoy European shares, but after another sharp slide on the Nikkei, Japan pushes for a global policy response to world market turbulence. Ivor Bennett reports.

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Resignation, yes. Despair, quite possibly. But against this backdrop, can you blame them? Across Asia, shares fell for a sixth straight session. The Nikkei suffering its worst week since October 2008. Japan has even called on G20 nations for a global policy response - something Charles Stanley's Jeremy Batstone-Carr says is long overdue. SOUNDBITE (English) JEREMY BATSTONE-CARR, CHIEF GLOBAL ECONOMIST, CHARLES STANLEY, SAYING: "It's got a sort of feel of Greece summer 2015 about it, doesn't it? You know, it's only when the rake in the long grass sticks up and hits somebody in the face that authorities feel the need to actually do something." So where did it all go wrong? After all, it's only two months since the apparent vote of confidence that was the U.S. rate rise. Since then though, there's a niggling feeling that central banks have lost control. Negative interest rates elsewhere triggering a sell-off in the banking sector and fears of a full-blown crisis. But is this just markets being markets? Commerzbank's 4th quarter results saw its shares jump 14 percent - dragging the sector back up. Self-inflicted or not though - there are more permanent problems says Batstone-Carr, like the supply-demand imbalance in commodities. SOUNDBITE (English) JEREMY BATSTONE-CARR, CHIEF GLOBAL ECONOMIST, CHARLES STANLEY, SAYING: "I think that if unaddressed, we could be looking at another run at 2008. Although the MSCI index is down something like 20 percent from its April 2015 high, I don't see any reason if unaddressed we couldn't see even further weakness, and a continued run into a perceived safe haven that is gold." Gold is already at a 1-year high. With China's markets reopening after a week off on Monday, investors are bracing themselves for what could be still to come.

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Is G20 needed to stop market mayhem?

Friday, February 12, 2016 - 01:43