Market Buzz: Trade cooling after Thursday sell off
Global markets have tumbled after US Federal Reserve Chair Ben Bernanke said the monetary regulator would begin drawing down its $85 billion bond-buying program later this year.
Friday promises to be a calm day on the global floors, as there
will be little news that could spark movement. The day previous,
traders rushed into major selloffs on the Fed’s announcement.
Russian stocks closed sharply lower Thursday, with the MICEX down
2.01 percent to 1297.01, while a strengthening US dollar caused
the RTS to slump 3.75 percent to 1243.32.
Massive selloffs were also seen in Europe, where the benchmark
Stoxx 600 index fell 3 percent to 283.68, and the UK’s FTSE 100
closed down nearly 3 percent – its biggest fall percentage-wise
since September 2011. Germany’s DAX ended 3.3 percent down at
7928.48, France’s CAC 40 closed 3.7 percent lower at 3698.93,
Spain's Ibex closed down 2.9 percent and Italy's FTSE MIB slid
3.1 percent.
US stocks also plummeted Thursday following the Fed’s Wednesday’s
announcement that it intends to begin scaling back its
$85-billion-a-month quantitative easing stimulus program. The Dow
fell 353.95 points to 14758.24, a 2.34-percent drop and the
index's worst fall so far this year. The S&P 500 posted its
biggest daily decline since November 2011, sliding 2.5 percent to
1,588.19, and the Nasdaq fell 2.28 percent to 3,364.63.
China’s HSBS has released its preliminary reading of Chinese
manufacturing PMI, showing that the world’s second-biggest
economy is weakening. June Flash HSBC PMI slid to a nine-month
low: 48.3, below the final reading of 49.2 in May. Reports that
the International Monetary Fund may halt its payments to Greece
also added to the negative sentiments.
Asian stocks continued to tumble Friday: China's Shanghai
Composite slipped 0.90 percent to 2,065.28, Hong Kong's Hang Seng
fell 1.14 percent to 20,150.50 and Japan’s Nikkei fell 1.26
percent to 12,850.94. Benchmarks in Singapore, Taiwan and South
Korea also fell.
Oil and gold prices also fell significantly on Thursday, with
gold dipping below $1,300 per troy ounce for the first time since
September 2010.
Oil prices also fell due to the raft of bad news, seeing its
biggest one-day price drop since November 2012. The WTI benchmark
for July slid 2.9 percent to finish at $95.40 in New York. Brent
crude was down $3.97, or 3.7 percent, to end Thursday at $102.94
a barrel in London.
Oil is climbing slightly on Friday, with Brent adding 0.7 percent
to trade at $102.80 and the WTI up 0.55 percent to $95.60.
