"ADRIFT IN FOG."

Auckland Star, Volume LXX, Issue 89, 17 April 1939, Page 7

"ADRIFT IN FOG."

MARKET SITUATION.

Germany Buys Large Stocks Of War Material. BRITISH BUDGET DEFICIT. United Press Association.—Copyright. (Received 1.30 p.m.) LONDON, April 16. "Adrift in a fog" is the "Financial Times" terse description of the market situation. The "Financial Times" industrial index is 94 and remains five points above the preMunich level, and there is the Avorst gold share index, despite the likelihood of 1939 being a record year in respect of output.

In contrast to the stock markets, there is plenty of evidence of business recovery. Domestic consumption of coal and electricity is expanding. Consumption of iron and steel Is increasing so rapidly that there is a possibility of a scramble for supplies. There is ample evidence that Germany has secured large stocks of raw materials essential for war,, notably nickel, imports of which in January and February were nearlv five times larger than for the corresponding months of 1938. Many are questioning the wisdom and morality of dealings which allow a vital constituent of armaments to pass into threatening hands.

The "Investors' Chronicle" estimates that the Chancellor of the Exchequer will face a prospective deficit of from £370,000.000 to £41,5,000,000 and considers there is a strong ease of raisin? the balance by taxation to avert the danger of inflation.

Activity of commodities slowed down, due to international tension. Movements of metals were not important. Sugar is hardening owing to the desire of all countries to hold adequate stocks against the contingency of war.

Wool, however, is comparatively unaffected. The conviction is generally held that the present prices are not likely to involve holders in loss. The trade considers that, despite the increase in staple fibres, producers should not be unduly alarmed. There is no evidence that substitutes will compete in any country where the public is allowed or is able to buy freely.

Butter is featureless with the exception of a sharp drop in Danish. Markets will continue to remain unsatisfactory as long as tension lasts.