Swine Flu Hits the Financial Markets
April 27, 2009 | Posted by Robert SWINE FLU STIRS FALLOUT IN THE MARKETS
The threat of a global pandemic of swine flu has set markets around the world tumbling as finance experts await news of the spread of the respiratory disease. The Dow Jones Industrial Average index and the FTSE have been just staying level since the confirmed outbreak started in Mexico on Friday. The international fluctuations seem to have favoured certain stocks however, as pharmaceutical giants GlaxoSmithKline and Roche both rose in value. The two giants have provided drugs to help prevent previous pandemics such as the SARS virus and Avian Flu in the past.
Foreign exchange also seems to be a popular market as the US Dollar strengthens against the Peso, Euro and British Pound. The US dollar is sometimes bought in a flight to safety type trade when international markets are in turmoil. The swine flu is bolstering the US currency according to Paddy Power’s financial spread betting venture, paddypowertrader. The company has seen spread bettors keenly follow the sharp rise in the price of the US dollar, over the past four days
The continuing global recession is unlikely to be helped by the outbreak of swine flu. Airline, hotel and leisure stocks dropped sharply as an outbreak of swine flu in North America raised fears of a further downturn in travel already depressed by the weak global economy.
However, spread bettors can be well positioned to take advantage of price- movement in either direction.
“Paddypowertrader has watched increasing numbers of spread bettors starting to move into US currency, airline stocks and pharmaceutical equities in the last couple of days. The number of trades on pharma stocks and airlines has significantly grown since the news of the outbreak hit the headlines in Mexico late last week,” said Davin McAnaney, Commercial Manager of paddy power.
“Paddypowertrader is eager to enable retail investors to get involved in the market through the medium of financial spread betting. This week we have seen spread bettors moving into plenty of short positions on indices and airlines and long positions on pharmastocks,” added McAnaney.
paddypowertrader launched in the summer of 2007 enabling clients to take advantage of the many benefits of financial spread betting, including being a tax–free alternative to trading shares and financial markets. The product continues to grow in popularity in the UK and Ireland, amongst not only financial industry professionals, but also amongst those with an interest in the stock market.
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
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