Financial Notes
0 VERSEA FACTORS IN MARKETS.
STOCK Exchange business seems destined never to remain long without disturbance from developments abroad. Twice during the past week or so events on the Continent have been uppermost in the mind of the market and the investing public, first through the reassuring news of the Franco-German rapprochement on the Saar question, and at the beginning of the current week through the rather disquieting direction in which the dispute between Yugoslavia and Hungary seemed to be leading. With the rights and wrongs of ques- tions of this kind the City, in its business capacity, is not concerned, but it is only natural that changes in the political atmosphere in Europe should have reactions in the security markets. Beyond turning the foreign exchanges slightly in favour of sterling, and helping to check any realizations of British Government stocks which may have been taking place in connexion with the withdrawal of European funds invested in this country, this week's Continental news had little effect on prices. Uncertainty, however, had its inevit- able effect of intensifying the inactivity of markets already lire-disposed to slackness by the approach of Christmas and the New Year. Apart • from the ever-present possibility that relatively small disagreements, in Europe may have important political and financial repercussions, the caution which the Stock Exchange displays vis-à-vis the Continent can be justified on immediate trade considerations. The great majority of variable dividend securities depend ultimately on international trade expansion for a resumption of dividends or an increase in existing distributions, and political as well as economic stability is one of the first essentials of an im- provement in international commerce. Inactivity on the Stock Exchange is thus logical when fresh evidence of political unsettlement is forthcommg.
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