World equities shudder again on economy jitters

Date

2/14/2016 12:35:40 PM

(MENAFN- Khaleej Times)

Stocks shuddered again on Thursday led by a sharp drop in Hong Kong as it caught up with global market turmoil after Lunar New Year holidays. An escalation in tensions between North and South Korea added to a litany of woes for markets that were already flustered by signs of slowing global growth and the slide in oil prices.

France's CAC 40 slid 3.5 per cent to 3920.77 and Germany's DAX dropped 2.7 per cent to 8774.59. Britain's FTSE 100 shed 2.3 per cent to 5541.02. Futures augured sharp losses on Wall Street. Dow futures sank 1.6 per cent to 15617.00 and S&P 500 futures fell 1.6 per cent to 1817.00. The dollar lost 1.8 per cent against the Japanese yen.

"What started in January as mainly China based worries has clearly broadened back out to concerns about global growth" said Shane Oliver chief economist at AMP Capital in Sydney. He said five fault lines are driving concerns about the global economy: the malaise in emerging markets the ongoing concerns about waning growth China the collapse in oil prices the strong dollar and fears that the global economy could plunge into a recession because of financial market turmoil.

Hong Kong's Hang Seng dived 3.9 per cent to 18545.80 after opening as much as five per cent lower. South Korea's Kospi staged its biggest daily drop in nearly four years down 2.9 per cent to finish at 1861.54. The Hong Kong and South Korean markets opened for the first time this week after Lunar New Year holidays. China and Taiwan will reopen on Monday. Japan was closed Thursday for a separate public holiday. Australia's S&P/ASX 200 was up one per cent to 4821.10. Singapore Thailand India and New Zealand fell while benchmarks in the Philippines and Indonesia rose.

Federal Reserve Chair Janet Yellen offered no major surprises in prepared remarks released before the start of her two-day Congressional testimony. She reiterated the Fed's confidence that the US economy was on track for stronger growth and a rebound in inflation. She cautioned global weakness and falling financial markets could depress the US economy's growth.

Benchmark US crude was down 82 cents to $26.63 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 49 cents or 1.8 per cent to close at $27.45 a barrel on Wednesday in New York. Brent crude a benchmark for international oils dropped 44 cents to $30.40 a barrel in London. The dollar slid to 111.32 yen from 113.35 yen the previous day. The euro strengthened to $1.1312 from $1.1282.

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