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Daily Analysis – European Debt Fears Hit Equities

ByBinary Options Strategy
Published 12/12/2011, 06:30 AM
Updated 05/14/2017, 06:45 AM
NDX
0.10%
DE40
0.48%
JP225
0.47%
HK50
2.64%
FTNMX301010
0.76%
Equities

Asian markets ended lower as investors focused on debt troubles in Europe. China’s markets led the declines, as the Shanghai Composite shed 2.5%, and the Hang Seng skidded 2%, following a report from the IMF that China’s banks face systemic risks. The Nikkei fell.9% to 8463, while Olympus shares surged 15%, amid growing expectations that the company will not be delisted. The Kospi dropped 1.6%, and the ASX 200 slid .9%.

In Europe, news that the ECB was buying bonds helped stabilize the markets. The major indexes closed mixed, with the CAC40 up .7%, while the DAX slipped .2% and the FTSE eased .1%. Despite the ECB’s efforts, Italian 10-year notes settled above the 7%.

Heavy selling hit US stocks in the last hour of the day, as investors were spooked by a report from Fitch which discusses US bank exposure to European debt. The Dow dropped 191 points to 11906, and the S&P 500 and Nasdaq both fell 1.7%.

Currencies

The Australian Dollar tumbled 1.1% to 1.0081, as risk aversion hit the market. The Euro and Pound both lost .5% to 1.3463 and 1.5730 respectively, and the Canadia n Dollar eased .3% to 1.0236.

Economic Outlook

Wednesday’s reports were upbeat, suggesting the economic recovery is picking up. The housing market index jumped to 20 from 17, its highest level in 18 months. Industrial production rose .7%, more than forecast. CPI data showed a drop of .1% in prices, but core CPI, which excludes food and energy, rose .1%.

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