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Stocks Drop, Yen Gains on Fragile Sentiment


Standard Group (SDG) according to Bloomberg news on 16 August 2018 - Stocks extended declines in Asia and the yen climbed after technology shares slumped on earnings concerns and copper sank into a bear market, weighing on commodities. Treasuries held gains.

Equities from Sydney to Seoul fell, tracking overnight moves in U.S. benchmarks that were led by the Nasdaq 100 Index. Crude oil slipped below $65 a barrel following a report that American stockpiles rose the most since March 2017. The dollar strengthened as investors sought its safe-haven status and the yen rose. Emerging-market shares fell within striking distance of a bear market. "We are not calling the bottom,” Lynda Schweitzer, a portfolio manager at Loomis Sayles, said in an interview in Sydney. "I don’t think our fundamental view of emerging markets has changed dramatically. There’s just a rise in risks around it.”

The lira spiked as Turkey moved to deter short-selling of the currency while Qatar promised Wednesday to invest $15 billion in the Turkish economy to help the country avert a financial crisis. Investor caution is returning even with the rally in American stocks just one week away from becoming the longest in history. Markets have been rocked over the past week as turmoil in Turkey weighed on sentiment across many emerging- and developed-nation assets.

Elsewhere, metals took a hammering. Palladium dropped more than 7 percent to a one-year low and copper fell more than 4 percent. In Hong Kong, currency interventions continued after the currency fell to the weak end of its trading band.

Here are some key events coming up this week:

  • Australia jobs data is coming Thursday.
  • Earnings are still to come from companies including Maersk and Carlsberg.
  • Brexit talks between the EU and the U.K. resume in Brussels Thursday.

These are the main moves in markets:

Stocks

  • Japan’s Topix index fell 1.7 percent as of 9:17 a.m. in Tokyo.
  • Futures on Hong Kong’s Hang Seng Index slid 1.3 percent.
  • Australia’s S&P/ASX 200 Index lost 0.6 percent.
  • South Korea’s Kospi index fell 1.3 percent.
  • Futures on the S&P 500 Index dipped 0.1 percent. The S&P 500 dropped 0.8 percent and the Nasdaq 100 fell 1.2 percent.
  • The MSCI Emerging Market Index fell 1.8 percent, taking its slide since its January high to almost 20 percent.

Currencies

  • The yen rose 0.2 percent to 110.56 per dollar after rising 0.4 percent.
  • The offshore yuan was at 6.9479 per dollar after sliding 0.6 percent.
  • The euro bought $1.1342.
  • The Bloomberg Dollar Spot Index is up 0.4 percent this week to the highest since June 2017.

Bonds

  • The yield on 10-year Treasuries held at 2.86 percent.
  • Australian 10-year bond yields slid three basis points to 2.55 percent.

Commodities

  • The Bloomberg Commodity Index fell 1.9 percent Wednesday to the lowest since July 2017.
  • West Texas Intermediate crude slid 0.3 percent to $64.84 a barrel.
  • LME copper was up 0.3 percent after sinking 4 percent.
  • Gold fell 0.1 percent to $1,173.55 an ounce, having slid more than 3 percent this week.