Stocks tum­ble as sell­off deep­ens

The Pak Banker - - MARKETS/SPORTS - NEW YORK -AFP

The global eq­uity rout ex­tended on Tues­day as first Asian and then Euro­pean mar­kets tum­bled, send­ing a gauge of world stocks to­ward the big­gest three-day slide since 2015. U.S. fu­tures bucked the trend, how­ever, while Trea­suries dropped and the dol­lar was steady.

The Stoxx Europe 600 In­dex slumped the most since June 2016, with ev­ery in­dus­try sec­tor fall­ing as much as 2 per­cent. Ja­pan's Nikkei en­tered a cor­rec­tion as most of the shares on the 1,000-plus mem­ber MSCI Asia Pa­cific In­dex de­clined. Amid the sea of red, some safe-haven as­sets, in­clud­ing gold and Euro­pean bonds, traded higher. Fu­tures for both the S&P 500 and the Dow Jones started on the back foot but clawed their way into the green.

"How far it goes down? You tell me," Steven Wi­et­ing, global chief in­vest­ment strate­gist at Cit­i­group Inc., said on Bloomberg TV. "But this speed of de­cline -you can­not keep do­ing this day af­ter day af­ter day with­out find­ing some sort of bot­tom rather quickly." Wi­et­ing said he an­tic­i­pates that mar­kets will stay volatile for a while.

Many fi­nance pro­fes­sion­als were left scratch­ing their heads to ex­plain the sever­ity of the moves in a short space of time. Anx­i­ety was build­ing about the out­look for mon­e­tary pol­icy prior to Mon­day's rout, with eq­ui­ties be­ing tested by the surge in bond yields. Global shares had just last month risen to record highs on op­ti­mism for ex­pand­ing prof­its and eco­nomic growth.

"I ac­tu­ally think there's buy­ing op­por­tu­ni­ties, maybe not today, but through this week as this sell-off ex­ac­er­bates," said Sean Fen­ton, a port­fo­lio man­ager who over­sees about A$1 bil­lion ($788 mil­lion) at Tribeca In­vest­ment Part­ners in Syd­ney.

Else­where, oil slumped for a third day and met­als joined the sell-off af­ter gain­ing. Bitcoin tum­bled for a sixth day to trade around $6,000.

Mon­e­tary pol­icy de­ci­sions are due in Rus­sia, In­dia, Brazil, Poland, Ro­ma­nia, the U.K., New Zealand, Ser­bia, Peru and the Philip­pines. Earn­ings sea­son con­tin­ues with re­ports from Gen­eral Mo­tors, Walt Dis­ney, SoftBank, Sanofi, Philip Mor­ris, To­tal, Tesla, Rio Tinto, L'Oreal and Twit­ter. Dal­las Fed Pres­i­dent Robert Ka­plan and New York Fed Pres­i­dent Wil­liam Dud­ley are among pol­icy of­fi­cials due to speak in Frank­furt and New York.

The Stoxx Europe 600 In­dex de­creased 2.2 per­cent as of 8:25 a.m. Lon­don time, hit­ting the low­est in more than five months with its sev­enth con­secu- tive de­cline and the largest dip in more than 19 months. Fu­tures on the S&P 500 In­dex rose 0.8 per­cent, the big­gest ad­vance in more than a week.

The MSCI Asia Pa­cific In­dex sank 3.5 per­cent on the largest tum­ble in more than 19 months. The U.K.'s FTSE 100 In­dex dipped 2.2 per­cent, reach­ing the low­est in al­most 10 months on its sixth con­sec­u­tive de­cline and the big­gest de­crease in al­most 10 months. The MSCI Emerg­ing Mar­ket In­dex sank 3 per­cent to the low­est in five weeks on the largest tum­ble in more than 19 months.

The Bloomberg Dol­lar Spot In­dex fell 0.1 per­cent. The euro rose 0.5 per­cent to $1.2424. The British pound gained 0.1 per­cent to $1.3976. The Ja­panese yen dipped 0.1 per­cent to 109.20 per dol­lar. South Africa's rand jumped 0.4 per­cent to 12.0765 per dol­lar. The MSCI Emerg­ing Mar­kets Cur­rency In­dex fell 0.1 per­cent.

The yield on 10-year Trea­suries in­creased six ba­sis points to 2.76 per­cent. Ger­many's 10-year yield de­creased three ba­sis points to 0.71 per­cent. Bri­tain's 10year yield de­clined three ba­sis points to 1.53 per­cent, the big­gest drop in al­most five weeks. West Texas In­ter­me­di­ate crude de­creased 0.6 per­cent to $63.78 a bar­rel, the low­est in more than two weeks. Gold rose 0.1 per­cent to $1,341.34 an ounce.

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