Stock market acts as an indicator of the economy. Their size is consisting of about 36 trillion dollars in the world economy and total value of the shares in the stock markets are about seven hundred and ninety one dollars. The major stock markets of the world are New York stock exchange (NYSE), Toronto stock exchange (TSE), London stock exchange, Bombay stock exchange, Singapore stock exchange, Tokyo stock exchange, Bombay stock exchange, Frankfurt stock exchange, Hong Kong stock exchange, the Shanghai stock exchange and Nigerian stock exchange.
Recently due to the economic recession the world economy becomes volatile, people don’;t like to invest in the stock markets and they prefer the metal over the stock market so this reason the stock market is going downwards and loosing the investor confidence. Investors like to invest in the gold and other metal and for this reason the activity in the stocks is on the decline. Gold is up by 30 % in no time and people are still investing in it and it is reported that there is the possibility that the gold prices still goes further higher and touches new records. This is not a good sign for the world stock markets. It also shows the current trend in the investment market.
New York stock exchange, London stock exchange, Tokyo and Hong Kong stock markets are the biggest stock market of the world. But we look at the US stock market firstly. August was very brutal for the stocks and market remain very volatile in the august due to the US economic crisis. Stock loose the points as they start on the higher note on the starting of the august and end on the lowest note on the august but if we modestly says that they gain little rise during the end of the august. Why I am saying gain little rise it means that the maid of the august was very bad and the market goes down below the 11,000 mark twice or thrice time in the august. But fortunately market took boost and now stocks are again about higher not higher than the points on the starting of the month but it is the good sign.
If we look august as whole and compare it to the previous month it shows that the stock markets go down in the august. There is sharp decline seen in he markets across the world. The main stimulus for this situation is the fears. As the economic growth in the united state is on the recession and there is the debt crisis in the European countries such as in Italy and Spain. According to the Paul Krugman who is the Keynesian economists, have pointed toward the soberness in the Europe and United States. There is no stimulus in the western markets and Americans market and the unemployment is increasing and the economic growth is on the decline. All these factors lead the Europe into the debt crisis and United States rating is downgraded to A+. So the investors are investing towards the money such as yen and metals such as gold.
In august due to the appreciation in the yen the Japanese government spends about 400 to 500 billion yen so that the exchange rate of the yen maintain at the 1$ =80 yen. German market DAX goes down about 5.6 % in the august in a single day. In the United Kingdom the FTSE 100 INDEX goes down 4.5 % in a single day which is the highest one day fall since the march 2009. On the 8 august all the US market goes down and this slump in a single day cost about 2.6 trillion dollars from the world equity value size. So the conclusion is that the first four weeks of the august 2011 was drastic but the last weeks the markets saws recovery.