How Baltic Index effects Stock market?

Baltic Dry Index is a leading economic indicator, lately, it has been also behaving as a leading indicator of the stock market. The Baltic Dry Index (BDI) is a bulk shipping rate that is issued daily by the Baltic Exchange in London. This BDI is the Rate it costs to move goods around the sea by cargo ship. These dry bulk carriers carry iron ore, coal, and grains but they mostly carry iron ore. We produce Dry Bulk Shipping Rates below, daily.

The Baltic Dry Index (BDI) is a measure of what it costs to ship raw materials—like iron ore, steel, cement, coal and so on—around the world. The Baltic Dry Index is compiled daily by The Baltic Exchange. To compile the index, members of the Baltic Exchange call dry bulk shippers around the world to see what their prices are for 22 different shipping routes around the globe. Once they have obtained these numbers, they compile them and find an average. The indices used are are: Baltic Panamax, Baltic Capesize, and the Baltic Supramax.

Q. Why watch the Baltic Dry Index in 2009?

A. The BDI predicts future economic actively and most economists use it as a leading indicator. When the world economy is booming, the BDI index will be soaring. When the world economy is weak, dry bulk shipping rates will be very low. Some people even think you can predict where the stock market is headed by watching this key daily rate.

Once can think of Baltic index as when the index rises markets are going to UP and vice versa. Day traders trade the following stocks based on the BDI index.

Stocks that trade off of the Baltic Dry Index: DryShips (DRYS), Excel Maritime Carriers EXM), Diana Shipping (DSX), Genco Shipping (GNX), TBS International (TBSI ), Navios Maritime (NM ), and OceanFreight (OCNF)

Baltic dry index is mostly used in the stock markets to predict the short term market movements. They can be used to interpret the markets for the next months or so on.

Dry Bulk Shipping Rates - November 3, 2009 - BDI Up 4 Straight Days
Baltic Dry Index (BDI) - 3247 Up 62
Baltic Cape Index (BCI) - 5394 Up 138
Index (BPI ) - 3279 Up 69
Supramax Index (BSI) - 1813 Flat

For Live Baltic dry Index visit: http://www.wikinvest.com/index/Baltic_Dry_Index_-_BDI_%28BALDRY%29/WikiChart

Also Consider reading : http://investmenttools.com/futures/bdi_baltic_dry_index.htm

Tags: baltic dry index, baltic dry index BSE, Baltic dry index nse, BDI, sensex and Baltic Dry index

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