(MENAFN– ecpulse)
Equity markets resumed the downside slide with the kick-start of trading Wednesday on rising tension in the Middle East. The fears of a US-led military intervention in Syria triggered heavy selling across the board.
Asian stock markets ended in red territories and surging oil prices are adding to the tension in the market. The fear of a western military intervention in Syria continues to be the major downside pressure on markets.
- The broad European gauge, STOXX 600 is trading lower by 0.24% at 298.23 the kick-start of trading
WTI crude oil futures for October settlement hit the intraday session high in early trading hours at $112.225 the highest since May 2011 adding more pressure on the market. The October contract turned lower after the session high trading around $110 with upside bias still in favor above $108.90 areas.
US president Barak Obama is currently working with allies to agree on the type of action to be taken against Syria which used chemical weapons against civilians last week, killing as many as 1,300 people according to Syrian opposition groups.
Obama is believed to have made 88 calls to foreign leaders since Wednesday`s suspected attack, and on Tuesday he spoke to UK Prime Minister for the second time. UK is gathering warplanes and military hardware in Cyprus preparing for a military strike.
- Germany’s DAX lower by 0.48% at 8205.43
- The French CAC 40 trading flat at 3963.18
- FTSE 100 trading lower by 0.35% at 6418.88
The gains with the start of session where seen in Italy, with the FTSE MIB up by 0.45% at 16655.25 supported by Prime Minister Enrico Letta’s plans to propose today reducing the real-estate tax imposed last year as part of the emergency austerity measures. The move eased the losses seen yesterday on hopes Letta will avoid conflict that will save his coalition.
We expect further volatility in the session and the market remains embraced for more losses amid lingering Syria fears. Eyes in Europe will be on Bank of England Governor Mark Carney’s speech at 1:45 p.m.in Nottingham, England.
The speech, hosted by Confederation of British Industry will address business leaders to tackle doubts regarding the new BoE forward guidance and how long the BOE can hold borrowing cost at its current low record of 0.50 percent.
From the United States, pending home sales for July will hold more clues on the state of the US economy to fuel the bets for soon Fed tapering once again.
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