--- title: Natural Phenomena That Move the Markets description: Find out how natural phenomena can impact global markets and finances. image: https://blog.marketresearch.com/hubfs/Weather_Umbrella.jpg --- [![MarketResearch.com](https://blog.marketresearch.com/hs-fs/hub/209482/file-22777923.gif?width=295&height=66&name=file-22777923.gif "MarketResearch.com")](https://www.marketresearch.com/) [Market Research Blog](https://blog.marketresearch.com/) # Natural Phenomena That Move the Markets by [Debbie Fletcher](https://blog.marketresearch.com/author/debbie-fletcher), on May 7, 2015 ![Weather, featured on www.blog.marketresearch.com](https://blog.marketresearch.com/hubfs/Weather_Umbrella.jpg "Weather, featured on www.blog.marketresearch.com")The effects of natural phenomena on global financial markets can be complex and often difficult to assess. Who are the winners and losers, and what are some of the common factors that contribute to the economic impact? To help understand this, let's take a look at a variety of natural phenomena from the last few years and their impact on affected markets. **Flooding: ****Southern England, Winter 2013-2014** The first weeks of 2014 saw [severe flooding in the south of England](http://www.bbc.co.uk/news/uk-26170904), with around 17,000 acres of Somerset left underwater. 800,000 homes lost power, and the West Country lost its rail link to the rest of the country for two months. The cost to the UK was estimated at more than £1 billion, and it was thought that the economy as a whole, and the insurance industry in particular, would take a battering. However, despite insurance costs of around £450 million, insurance companies escaped largely unscathed. Insurer Hiscox actually experienced a surge in its share price as the weather deteriorated in December, and although it lost over 7% during the worst of the flooding in January, it quickly stabilised. Similarly, despite warnings about the impact on economic activity, the [FTSE 100](http://www.ig.com/uk/ig-indices/ftse-100) started March around 200 points higher than it had been at the start of December. The genuine losers were property owners with uninsured losses, whilst the winners were builders, repairers and flood defence manufacturers. **Volcano: Eruption of Eyjafjallajökull, Iceland, April 2010** A [volcanic eruption in Iceland](http://en.wikipedia.org/wiki/2010_eruptions_of_Eyjafjallaj%C3%B6kull) had huge consequences across northern and western Europe. The resultant ash cloud led to around 20 countries closing their airspace for almost a week, affecting 10 million journeys. A strongly performing FTSE 100 was stopped in its tracks, dropping 27 points on the first morning of the airspace closure. Unsurprisingly, airline share prices were immediately hit, with British Airways' (BA) shares dropping more than 3% and easyJet down 5%. BA claimed that the closure of European airspace cost it between £15 million and £20 million per day. Those companies that helped people avoid the airspace shutdown – Eurostar, ferry operators and video conferencing providers such as BT, which reported an 11% surge in demand – will look back on the volcano far more fondly than the rest of us. **Disease: Ebola pandemic, 2014** Despite Western countries being largely unaffected by this deadly disease, stock markets in London and New York responded to the fear and panic it generated. On the day that the U.S. announced that a nurse infected with Ebola could have come into contact with up to 300 people, the Dow lost over 350 points. All of these events had very different immediate impacts. However, what all these kinds of natural phenomena have in common – particularly in a world of 24 hour news and social media – is the indirect effect they have on global markets because of human emotions. It is important for businesses to be as prepared as possible for natural phenomena, whether to minimize risk or to capitalize on opportunity. Developing a proper market research strategy can help in understanding how potential phenomena can impact your market. To learn more about developing a market research strategy, download our recent eBook, [*How to Succeed Using Market Research*](https://content.marketresearch.com/how-to-succeed-using-market-research-ebook). 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