MARKETS ADRIFT.

Manawatu Standard, Volume LIX, Issue 116, 17 April 1939, Page 7

MARKETS ADRIFT.

INTERNATIONAL TENSION. BUDGET PROSPECTS. Received April 17, 9.10 LUNDUN, April IG. “Adrift in a fog’" is ilie terse description given by the Financial Times to the market situation. The Financial Times's industrial index at 94 remains live points above tire pre-Munich level. There is the worst gold share index despite the likelihood that 1939 will be a record year in respect of output.

In contrast to the stock markets, there is plenty of evidence of business recovery. 'I lie domestic consumption of coal and electricity is expanding and the consumption ot iron and steel is increasing so rapidly that there is a possibility of a scramble for supplies.

There is ample evidence, too, that Germany lias secured large stocks of raw materials essential for war, notably nickel, her imports of which in January and February are nearly five times larger than in the corresponding months of 1038. Many are questioning tiie wisdom and morality of dealings which allow this vital constituent of armaments to pass into threatening hands T lie Investors’ Chronicle estimates that the Chancellor of the Exchequer (Sir John Simon) will face a prospective deficit of from £370,000,000 to £415,000,000. It considers that there is a strong ease for raising the balance by taxation to avert the danger of inflation. WOOL UNAFFECTED.

Commodities activity slowed down due to international tension. The movements of metals are 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 present prices are unlikely to involve holders in a loss. The trade considers that, despite the increase in staple, fibres, producers should not he unduly alarmed. There is no evidence that substitutes will compete in any country where the public are allowed and are able to buy'freely. Butter is featureless with the ex> c-eption of a sharp drop in Danish.

The markets will continue to remain unsatisfactory as long as the tension lasts.