BRIGHTER ASPECT

Evening Post, Volume CXXV, Issue 80, 5 April 1938, Page 14

BRIGHTER ASPECT

LONDON AND NEW YORK

SHARE MARKETS IMPROVE

'By Telegraph—Press Assn.—Copyright.) (Received April 5, 10 a.m.) ;, ' . ' LONDON, April 4. •The stock and share markets have,a more tone -about them than has been usual of late. -.'■■ "The change of outlook follows on improvement in the situation in Wall Street. British funds prices are firm. International investments and oil shares aye f quoted at appreciably higher prices.

The change in .the outlook of .the -London investment market referred to in the above dispatch follows/on a violent break in .prices in Wall Street a few days back. The London Stock Exchange felt the shock on March 26, . and it was described as "the worst this year." Prices on the New York Stock Exchange fell to the lowest level for three, years. The Dow Jones iijdex for 30 American industrials sagged to 107, representing a fall of 45 per cent, in 12 months. .„ „.■ Fears were entertained .that if the index broke through last' year's low ' level of 113.64, registered in November, the decline would be accelerated. There were two reasons for these fears. Firstly, Dow theorists would probably . interpret the breaking of the "resistanceI'level as a sign' that they should sell; Secondly, under the margin system of tradingdn New York, each sharp fall in prices uncovers "stop loss' selling - orders. Both these factors would bring selling. pressure into the ■ market and would accentuate the fall., , '■ •The decline in American stocks began about a year ago, when President Roosevelt announced that raw material' prices were too high, ana, -n was rumoured, that the American price, . of gold .would beyreduced.. It gathered momentum because ? .ofv ■, widespread labour r-troubles in .the JJnited^ States and a general failing off; in, industrial activity. PreHdent Roosevelt adopted a- hostile attitude • towards^ "big • business;" at' any- rate, "big business ,'s.g; interpreted it;.and the Administration also imposed increased' taxation on company profits. To make matters worse, there'had not been a satisfactory seasonal v improvement in i Amen-. ' can business conditions this. year. ■■ \ ;- "The Economist" .(London), in. commenting' On the economic situation an; the United: States/ suggested, that senti :; ment was there becoming increasingly, defeatist." Now a turn for the better seems to have been made.