Equities, commodities and emerging market currencies suffered hefty losses yesterday as risk averse investors shifted to the perceived safety of the dollar, the yen and government bonds.
“Risk aversion has resurfaced as market participants take profits on riskier exposures amid the World Bank's downward revision of its global growth forecast for 2009,” said Samarjit Shankar, director of global strategy at Bank of New York Mellon.
“Renewed concerns about the extent of the ongoing global recession and the sustainability of the ‘green shoots' of recovery have combined with the instability unfolding in Iran and North Korea to lend an air of pessimism to investor sentiment.”