Shares feel effect of sub-prime lending crisis

Negative sentiment deterred foreign investors from buying US equities during the first five months of 2007 while US investors switched their domestic funds to emerging and developed markets in Europe, Australasia and the Far East. Amid volatile trading conditions this summer, shares on both sides of the Atlantic hit peaks in mid-July before suffering a correction amid growing evidence of financial contagion from the US sub-prime lending crisis. In response, investors should ask whether they should reassess their global exposures. By contrast, US equities have been relatively subdued but t...