A Newry born financial analyst, who is based ion New York, says the disruption to the markets after Hurricane Sandy forced Wall Street to close yesterday could be considerable.
Grace Smith, who works for financial software company First Derivitaives which is headquartered in Newry, says the level of disruption to financial markets would depend on the length of time institutions were shut because of the hurricane which is hitting the US East Coast closing businesses. paralysing transport networks and forcing mass evacuations.
Speaking to the News Letter yesterday from her office on the eighteenth floor of a building in Manhattan, where she is based with banking group Credit Agricole, Grace said:
“If Wall Street is closed just for a day then the impact will be minimal - but if there is a big infrastructure break down and closures continue, then the damage to the markets could be considerable.”
Traders in London were left in limbo yesterday after Hurricane Sandy forced Wall Street to shut down for the first time since the September 11 attacks.
Investors struggled to find direction after it was confirmed that America’s two biggest trading platforms - the New York Stock Exchange and the Nasdaq Stock Market - would not open as scheduled at 1.30pm GMT.
The markets - home to some of the world’s biggest companies including Apple, Microsoft and Starbucks - also look set to be closed today, while commentators fear the suspension could run into Wednesday.
Michael Hewson, senior UK market analyst at CMC Markets, said the biggest impact of the shutdown in the US was likely to be a drop in trading volumes - an indicator of a lack of certainty among investors.
He added that amid concerns about the wider global economy, the US shutdown was “yet another reason for traders to remain on the back foot”.
Insurers came under pressure with the likes of Hiscox, Amlin and Catlin - major underwriters for the whole industry - falling on the FTSE 250 Index amid fears the approaching superstorm would cause billions of US dollars of damage. The FTSE 100 Index was more than 0.5 per cent lower.
The New York Stock Exchange initially said it would only close the market floor but continue using electronic trading - but this was later changed to cover all forms of trading.
Lloyds of London insurers have had a benign year for natural catastrophes, in sharp contrast to the previous year when the specialist market was pushed to a loss by a series of disasters.
A statement from NYSE Euronext, which operates the New York Stock Exchange, said: “We support the consensus of the markets and the regulatory community that the dangerous conditions developing as a result of Hurricane Sandy will make it extremely difficult to ensure the safety of our people and communities, and safety must be our first priority.
“We will work with the industry to determine the next steps in restoring trading as soon as the situation permits.”
It is the first time the markets have shut since the four-day stretch in the wake of the attacks on the World Trade Centre on September 11 2001, while it is thought to be the first time in 27 years that they have closed for a full day due to adverse weather.
Some of New York’s financial district is in the evacuation zone and major banks such as Goldman Sachs and Citigroup have told staff not to go into work.
A statement from Nasdaq said: “The continuity of our markets and a variety of factors related to Hurricane Sandy’s movement up the Eastern Seaboard were considered, including the state of emergencies declared by New York City, New York State and other state and local governments.”