(MENAFN– ecpulse) World stock indexes edged lower last week, extending weekly gains as discouraging economic news from China and intensifying tensions in Ukraine unnerved investors. However, Geopolitical tensions supported bond market.
Growing concerns that events surrounding Ukraine are escalating and that China`s slowing growth will rub off on the global economy and bite into corporate profits, drove equities lower last week. Markets appeared to ignore positive economic data from the U.S. on retail sales and the labor market.
Heightened tensions ahead of Ukraine`s weekend referendum in Crimea and stresses over China`s growth sent investors scurrying into safe-haven gold. Gold rose to a six-month high as fears of economic slowdown in China and lingering worries about Russia’s military standoff with Ukraine boosted bullion`s appeal.
Last week, Germany`s Angela Merkel warned Moscow it risked "massive" political and economic damage if it refused to change course on Ukraine, saying leaders were ready to impose sanctions on Russia if necessary.
Merkel’s comment came just days after U.S. President Barack Obama said that if Russia continues an aggressive path in Ukraine, the U.S. and other countries will, be "forced to apply costs" to Moscow.
Obama again warned Moscow there will be consequences if it doesn`t remove its troops from Crimea, while he added that he will stand with Ukraine in ensuring that its territorial integrity is maintained, in a display of support for the fledgling government.
Cautious investors will keep an eye on the Ukraine crisis and awaited more information on the direction of the economy, amid a scheduled vote on Crimea this weekend, on Sunday.
Voters in the Crimea of about 2 million people will choose between asserting independence from the former Soviet republic or joining neighboring Russia. There is no option for the status quo, which is remaining a part of Ukraine.
Results are expected Monday and U.S. officials have made clear they expect Crimean voters to choose to become part of Russia. Whatever the outcome, the vote planned by Crimea`s regional parliament and endorsed by Russia`s government is expected to further inflame the Ukrainian crisis.
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