The Week In Hindsight, 07 March 2014
The FTSE 100 opened sharply lower on Monday morning this week as the markets awoke to news of a Russian military incursion into Ukraine over the weekend (See our report on Ukraine for further information). After an initial panic led sell off, equity markets made a brief recovery later on Monday and throughout Tuesday, aided by a better than expected US ISM Manufacturing PMI.
Despite a noble effort, the index eventually succumbed to heavy selling pressure once again as both investors and traders dumped the resources sector. This was in part due to profit taking ahead of the weekend as well as the continued presence of Russian troops in some areas of Ukraine.
Another factor to ave weighed on the FTSE was, once again, rising concerns over both the Chinese economy and the Chinese financial system. This was as the announcement of a further contraction in manufacturing was swiftly followed by the first ever on-shore corporate debt default later in the week.
Chaori Solar Energy Science and Technology announced that it had been unable to raise the necessary funds required in order for it to meet scheduled coupon payments on one of its bonds due Friday morning. (See our China Report).
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