Japan’s nuclear crisis deepened today as the third blast at the Fukushima Daiichi Nuclear Power Station forced the evacuation of emergency workers and the Prime Minister Naoto Kan to warn of a clear possibility of nuclear radiation leaks. Markets took a turn for the worse on news of elevated radiation readings in Tokyo, pushing the Topix index to its worst two-day plunge since 1987 and dragging other major stock markets along with it.
As we know, markets do not like uncertainty. At this point of writing, there is still much confusion as to the real status of the nuclear fallout. Given that, we expect the markets to trade on news flows with a bias to exaggerating the risks. We feel there is further downside risk in the near term but it is not easy to quantify. The best strategy as always is to remain well diversified.
We feel there are opportunities to invest in this crisis – in coal, oil and gas as well as construction and building materials companies – but now we need some patience. We will keep you updated on further action.
As we know, markets do not like uncertainty. At this point of writing, there is still much confusion as to the real status of the nuclear fallout. Given that, we expect the markets to trade on news flows with a bias to exaggerating the risks. We feel there is further downside risk in the near term but it is not easy to quantify. The best strategy as always is to remain well diversified.
We feel there are opportunities to invest in this crisis – in coal, oil and gas as well as construction and building materials companies – but now we need some patience. We will keep you updated on further action.
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