Investors around the world were watching Australia today with deep concern.
Overnight, European Stock Markets hit a two year low with $45-billion wiped off shares.
And there were fears the damage could spread to the Australian Stock Market and to the Aussie dollar.
The financial turbulance was a hot topic for economists and business leaders at today’s Business Forecasting Conference in Brisbane.
Michelle Thomas reports.
It was sheer panic that gripped European Stock Markets overnight.
The crash, fuelled by anxieties about the capacity of Greece to pay back its debt, hit the Euro currency hardest. Some experts saying it might not even survive for much longer.
Stock exchanges also suffered.
Germany’s DAX index fell below 5000 for the first time since July 2009.
Oliver Roth, Analyst: “We will face some more attacks on the 5000 within this week.”
In the U.S, shares staged an almost miraculous comeback in late trade, closing higher after seeing steep falls during the day.
On the Australian Stock Exchange, investors largely held their nerve, although the Aussie dollar did drop to a one month low, down three US cents.
Despite the turmoil overseas, economists here believe that the Australian Market will continue to be strong.
Dr Frank Gelber, Chief Economist BIS Shrapnel: “The truth is we’re just caught in the contagion, that a lot of the problems overseas are not problems for us, we’re not exposed to those problems directly, and indirectly we’re a popular place for investment.”
That popularity means global doom and gloom is NOT about to migrate to Australia.
Economists assure that any Australian struggles will be short lived and simply a sign of financial recovery not decline, and that globally, Australia is sitting pretty.
Forecasters say we shouldn’t fear the financial stresses being felt around the globe but, instead take stock of the big issues at home such as interest rates and what to do when the nation’s current mineral boom ends.
Dr Frank Gelber, Chief Economist BIS Shrapnel: “We’ll see a collapse in minerals investment, not immediately, but once we complete minerals projects, which means a negative impact on the sectors and regions which service that investment.
The end to the ‘mineral domination’ could spell the loss of US parity for the Australian dollar and that would be a big blow to our economy’s global competitiveness.
Michelle Thomas, QUT News.