BRITISH TRADE REVIEW

Dominion, Volume 22, Issue 212, 4 June 1929, Page 11

BRITISH TRADE REVIEW

UNSETTLED CONDITIONS ON STOCK EXCHANGE DEPRESSING INFLUENCE OF THE ELECTIONS » PERIOD OF INACTIVITY FORESHADOWED Conditions on the London Stock F change during the past few da i have been very unsettled, due to the political uncertainty, the illness of the King, and the doubts whether agreement would be reached on the German reparations problem. (United Press Association.—By ElectrU Telegraph.—. Copyright.) Australian Press Association. London, June 1 For the past ten days conditions on the London Stock Exchange have been very unsettled. The general election, the uncertainty regarding the Reparations question, and the slump in Wall Street have all tended to restrict business and cause dullness in most markets. On Friday morning came the news of the King’s illness, which increased the depression, and naturally things did not improve as the day wore on and the Socialist successes at the polls became more pronounced. Even reports of agreement being reached at the Reparations Conference failed to improve matters, but though prices were marked down all round, declines were only small and sales were very few.

In regard to the future the “Morning Post’s” financial editor writes: “The next few days are likely to be characterised by great restraint in Stock Exchange dealings, and even if the favourable reports that agreement has been reached at the Reparations Conference should be confirmed, it is doubtful whether, in the present temper of the markets, much effect is likely to be produced thereby. The effect of the political landslide here upon foreign markets has yet to be gauged, while a truer test of market conditions will be applied when investors all over the country have had the week-end in which to consider the possible effect of the accession to strength of the Socialist Party.”

Another financial editor writes: “There is a general feeling in the city that we are confronted with a new and difficult situation, one effect of which will probably be to restrain all kinds of activity for some little time to come. With fairly strong opposition the city may not be immediately fearful of any violent socialistic legislation. On the other hand, the hopes which had been entertained during the last few weeks that the return of a Conservative Government with a working majority would ensure a rapid stimulus to trade activity throughout the country have to be abandoned for the present; while inactivity on the Stock Exchange usually means a falling rather than a rising in the prices of securities.”

Wool and Textile Industry Depressed.

Regarding wool, a Bradford correspondent writes: —“Though there were hopes that with the general election out of the way business would improve, it is feared the root cause of the depression goes much deeper than the influence of politics. The wool and textile industry in the entire world is more or less depressed at the moment, a lack of confidence in current values being as much in evidence in Continental centres as in England. Demand in all markets is restricted to small quantities for immediate requirements. Little developments can be expected until users in all countries are satisfied that raw wool is again on a firm basis. Bradford quotations are largely nominal. There is not enough business to test the market.”

Slump in Wheat Values. The slump in wheat values has brought that commodity into the select group of articles which can be bought wholesale at pre-war prices. The “Investors’ Chronicle” says:—“Belief that still lower prices will be reached is undoubtedly encouraging the decline, for few will buy when prices are falling. Reactions of low prices for the world’s chief staple food must prove important in due course and lead to a further cheapening of flour and of bread. Cheap wheat should certainly favour Europe as a whole and will mean in the coming autumn that the amount Europe has to pay to America for grain (an important factor influencing the sterling dollar exchange rate) will be smaller than has been usual in late years.” Apple Market Satisfactory. Although arrivals of Australian and New Zealand apples have recently been heavy, the demand has improved owing to the decrease in American supplies, and as the quality of the fruit from all the States has been generally satisfactory, prices have firmed ini all markets except* Hamburg, which appears to be receiving more apples than can conveniently be handled there. We have now passed half-way in the Australian and New Zealand season, and results appear likely to be satisfactory to the finish. French cherries have been fairly plentiful, but will be smaller after June 15, when the Government restrictions on their imports will commence.