Global Markets: Asia stocks shunned as investors flee for safety
By Wayne Cole SYDNEY (Reuters) - Global stocks were sailing into Christmas on a sea of red on Friday as the threat of a U.S. government shutdown and of further hikes in U.S
By Wayne Cole
SYDNEY (Reuters) - Global stocks were sailing into Christmas on a sea of red on Friday as the threat of a U.S. government shutdown and of further hikes in U.S. borrowing costs inflamed investor unease over the economic outlook.
The S&P 500 <.SPX> was heading for its worst quarter since the dark days of late 2008, with a loss of 15 percent so far. The Nasdaq has shed 19.5 percent from its August peak, just shy of confirming a bear market.
Oil prices slid just over 4 percent overnight, bringing Brent's losses since its October top to 37 percent. And the dollar suffered its biggest one-day drop on the yen since November 2017 as investors stampeded to safe havens.
Michael McCarthy, chief market strategist at CMC Markets, said the downward spiral was becoming self fulfilling with selling begetting more selling.
"Negative momentum is a key factor in driving investor behaviour. Fundamental justifications are following the action," said McCarthy. "The selling will finish when it is done."
Early Friday, E-Mini futures for the S&P 500
South Korean stocks <.KS11> slipped 0.3 percent and Japan's Nikkei <.N225> 0.5 percent.
The Nikkei had already hit a 15-month low on Thursday when the U.S. Federal Reserve largely retained plans to increase interest rates despite mounting risks to growth.
Markets were further spooked when U.S. President Donald Trump refused to sign legislation to fund the U.S. government unless he got money for a border wall, thus risking a partial federal shutdown on Saturday.
"Political brinkmanship in Washington is further heightening market uncertainty," said Westpac economist Elliot Clarke.
"Friday will be a tense day in Washington, and for financial markets, as a last-minute compromise is sought."
Adding to the air of crisis was news U.S. Defense Secretary Jim Mattis had resigned after Trump proposed withdrawing troops from Syria and sources said a military pullback from Afghanistan was on the cards.
The brittle mood showed on Wall Street where the Dow <.DJI> ended Thursday with a loss of 1.99 percent. The S&P 500 <.SPX> dived 1.58 percent and the Nasdaq <.IXIC> 1.63 percent. [.N]
STAMPEDE FOR THE EXITS
The sea change in sentiment has triggered a rush out of crowded trades, including massive long positions in U.S. equities and the dollar and short positions in Treasuries.
Lipper data out Thursday showed investors pulled nearly $34.6 billion out of stock funds in the latest week and were heading for the biggest month of net withdrawals on record.
There was also a sense of capitulation in currency markets as the dollar dived 1.1 percent on the yen on Thursday to hit a three-month trough at 110.80
The euro had jumped to its highest in over six weeks at $1.1485
The Swedish crown
The flight from risk was a boon to sovereign bonds, where U.S. 10-year yields
The gap between two- and 10-year yields
The rally in longer-dated paper has been fuelled by the huge slide in oil prices, which will pile downward pressure on inflation at a time when the global economy was already slowing.
Both Brent and U.S. crude futures reached their lowest in more than a year overnight amid a glut of supply. U.S. crude
Going the other way was gold, as the precious metal benefited form the sharp reversal in the dollar to stand at $1,262.11 an ounce
(Editing by Shri Navaratnam)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.
By Jessica Resnick-Ault NEW YORK (Reuters) - Oil prices strengthened on Wednesday, as OPEC and its allies were seen complying with a pact to cut oil supply in September, even as concerns loomed that recovery in fuel demand will be stalled by soaring global coronavirus cases. Early in the day crude was boosted by a bullish stock market. Even as equities whipsawed on pandemic worries, oil stayed higher, buoyed by expectations that OPEC could staunch a supply glut
By Tina Bellon and C Nivedita (Reuters) - Tesla Inc will further cut the price of its Model S "Long Range" sedan in the United States to $69,420, the electric carmaker's chief executive, Elon Musk, announced in a tweet https://bit.ly/2H0JCP0 on Wednesday. The anticipated drop marks the second time this week Tesla has cut the price for the high-end sedan, following a 4% cut of the Model S's price in the United States on Tuesday to $71,990.
By Jeff Mason DES MOINES, Iowa (Reuters) - Under siege over his handling of the novel coronavirus pandemic, President Donald Trump on Wednesday cited what he said was his son's mild bout of the virus as a reason why American schools should reopen as soon as possible. Trump made the comment about his son, Barron, as the president swept into Iowa on a mission to shore up support in battleground states that he won in 2016 but is in danger of losing to Democrat Joe Biden barely three weeks before the election. First lady Melania Trump announced in a statement earlier in the day that the virus that struck both her and her husband had also infected their 14-year-old son