US stocks de­cline fol­low­ing global rout

The Pak Banker - - MARKETS/SPORTS -

U.S. stocks ended lower Thurs­day as in­vestors rushed to safe-haven as­sets amid a global rout in equity mar­kets.

The Dow Jones In­dus­trial Av­er­age dropped 254.56 points, or 1.60 per­cent, to 15,660.18. The S&P 500 lost 22.78 points, or 1.23 per­cent, to 1,829.08. The Nas­daq Com­pos­ite In­dex fell 16.75 points, or 0.39 per­cent, to 4,266.84. Europe stocks were dragged down by the bank­ing sec­tor amid grow­ing un­cer­tainty sur­round­ing in­ter­est rates and non-per­form­ing loans, with French bench­mark in­dex CAC 40 div­ing 4.05 per­cent. In Asia, Hong Kong's Hang Seng In­dex fell 3.9 per­cent as the mar­ket re­opened af­ter the ex­tended hol­i­day, catch­ing up with the week's tur­moil.

Mean­while, in­vestors were still di­gest­ing U.S. Fed­eral Re­serve Chair Janet Yellen's com­ments launched in a tes­ti­mony be­fore the Com­mit­tee on Fi­nan­cial Ser­vices of the U.S. House of Rep­re­sen­ta­tives on Wed­nes­day. "With grad­ual ad­just­ments in the stance of mon­e­tary pol­icy, eco­nomic ac­tiv­ity will ex­pand at a mod­er­ate pace in com­ing years and that la­bor mar­ket in­di­ca­tors will con­tinue to strengthen," Yellen said. But she ac­knowl­edged that fi­nan­cial con­di­tions have be­come less sup­port­ive of growth, "with de­clines in broad mea­sures of equity prices, higher bor­row­ing rates for riskier bor­row­ers, and a fur­ther ap­pre­ci­a­tion of the dol­lar."

Yellen's tes­ti­mony failed to of­fer any sig­nal on whether the cen­tral bank will change the in­ter­est rate on its next pol­icy meet­ing on March 15-16. She only re­peated that the ac­tual path of the in­ter­est rate will de­pend on in­com­ing data. An­a­lysts thought Yellen's re­marks hinted that the U.S. cen­tral bank still keeps door open to fur­ther in­ter­est rate hikes, but flag­ging risks could de­lay any fur­ther moves.

The CBOE Volatil­ity In­dex, of­ten re­ferred to as Wall Street's fear gauge, rose 7.04 per­cent to end at 28.14 Thurs­day. In other mar­kets, oil prices moved down Thurs­day as mar­ket ex­pected the sup­ply to sur­pass the de­mand. The West Texas In­ter­me­di­ate for March de­liv­ery de­creased 1.24 U.S. dol­lars to set­tle at 26.21 dol­lars a bar­rel on the New York Mer­can­tile Ex­change, while Brent crude for April de­liv­ery fell 78 cents to close at 30.06 dol­lars a bar­rel on the Lon­don ICE Fu­tures Ex­change.

The U.S. dol­lar slipped to 15-monthlow against the Ja­panese yen on Thurs­day as global mar­ket tur­moil con­tin­ued to raise need for safe-haven as­sets. In late New York trad­ing, the euro climbed to 1.1338 dol­lars from 1.1272 dol­lars in the pre­vi­ous ses­sion, while the dol­lar bought 112.21 Ja­panese yen, lower than 113.76 yen of the pre­vi­ous ses­sion. Gold fu­tures on the COMEX divi­sion of the New York Mer­can­tile Ex­change rose to its high­est level in a year on Thurs­day as U.S. eq­ui­ties took a sharp down­turn in re­ac­tion to a de­creas­ing cost of oil.

The most ac­tive gold con­tract for April de­liv­ery surged 53.2 dol­lars, or 4.45 per­cent, to set­tle at 1,247.80 dol­lars per ounce. Sin­ga­pore stocks fin­ished higher on Fri­day, with the bench­mark Straits Times In­dex (STI) up 1.67 points, or 0.07 per­cent, to close at 2,539.95.

A to­tal of 900.7 mil­lion shares changed hands with turnover of 1.16 bil­lion Sin­ga­pore dol­lars (828.6 mil­lion U. S. dol­lars). De­clin­ers out­num­bered gain­ers 215 to 149, while 559 oth­ers fin­ished un­changed.

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