FINANCE AND INVESTMEN F
By CUSTOS
MARKETS are back on the defensive, but they are putting up a tough resistance. News such as broke over the air on Tuesday morning was bound to impose an effective chLck on buying, and nobody will want to open up fresh commit- ments on any serious scale until the North Sea mists bein to lift. So much is obvious. What is more significant is that in this test of nerves the investing public has stood absolutely firm. As a normal precaution jobbers quoted prices rather wider and lower on Tuesday than at the close of business on Monday, but very few investors seemed at all anxious to sell. So, apart from a momentary paralysis of dealings, markets have continued to function freely. If it is true that very little business has been done it is also true that this has been due merely to the aloofness of investors and not to the breakdown of facilities.
The truth is, of course, that ever since last September —and even before that time—the speculative position in the stock markets has been quite exiguous. In consequence, securities are now in the hands of people who have made up their minds to see things through. Add to this stoical indifference of investors the various props, such as minimum prices and restrictions on " bear ' selling, which now reinforce the market's defences and you have solid enough reasons why crises need not bring any panicky slump. I am not suggesting that it will always be- possible to sell freely at the current level of quotations—that would imply official support of a kind which has never been contemplated—but I think there is evidence enough that investors will not want to sell heavily in times of crisis and that the worst that is likely to happen will be a temporary freezing up of price; not far below the existing level.
* *
Previous page
