Investing.com - Financial Markets Worldwide

Western Equities Slump

ByBinary Options Strategy
Published 05/18/2012, 07:07 AM
Updated 05/14/2017, 06:45 AM
NDX
-0.29%
DE40
0.58%
JP225
0.33%
HK50
1.47%
BKIA
0.00%
Equities

Following Wednesday’s sharp drop in Asian stocks, the region rebounded modestly on Thursday. The Nikkei gained .45 to 8876, and the Kospi ticked up .3% to 184, ending a 6-day losing streak. In China, the Shanghai Composite rallied 1.4%, after the government announced a new appliance subsidy, which could boost domestic consumption. Lagging behind, the Hang Seng slipped .3% to 19201, as HSBC shares fell 1%, and the ASX eased .2% to 4158.

Panning to the West, European markets skidded, as the market focused on Spain’s debt troubles. The FTSE, DAX, and CAC40 all fell 1.2%, while the banking sector slumped 2.7% to a new record low of 79.40. Shares in Spanish bank, Bankia, plunged 14.1% after a newspaper report said customers had withdrawn more 1 billion euros over the last week, raising fears of a bank run. Fitch downgraded Greece to CCC from B-, after the ECB said it had stopped providing liquidity to undercapitalized Greek banks.

Selling pressure continued in the US, as the VIX spiked to 24.49, a 5-month high. The Dow fell 156 points to 12442, the S&P 500 sank 1.5% to 1305, and the Nasdaq tumbled 2.1% to 2814. This was the 5th straight loss for the Dow and S&P 500.

JP Morgan dropped 4.3% after the bank said the $2 billion trading loss had grown significantly over the past few days.

Currencies

The shift to risk-off helped sent the Yen surging, jumping 1.3% to 79.32. The Dollar’s gains were more limited. The Pound and Canadian Dollar both fell .7% to 1.5795 and 1.0192 respectively. The Euro, Swiss Franc, and Australian Dollar all declined .2%.

Economic Outlook

Weekly unemployment claims remained at 370K, slightly weaker than forecast, and the Philly Fed manufacturing index unexpectedly fell to -5.8 from last month’s 8.5 reading.

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