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Stocks tumble as global selloff deepens: markets wrap

Feb 06 2018 12:29
Samuel Potter, Bloomberg

London - The global equity rout extended on Tuesday as first Asian and then European markets tumbled, sending a gauge of world stocks toward the biggest three-day slide since 2015.

S&P 500 futures fluctuated before steadying, while Treasuries dropped and the dollar edged lower.

The Stoxx Europe 600 Index at one point slumped the most since June 2016, with every industry sector falling as much as 2%.

Japan’s Nikkei entered a correction as most of the shares on the 1 000-plus member MSCI Asia Pacific Index declined. Amid the sea of red, some safe-haven assets, including gold and European bonds, traded higher.

Futures for the S&P 500 started on the back foot and then swung between gains and losses.

“Let’s be clear: in the long span of financial history, this is not news,” said James Bateman, CIO of multi asset at Fidelity International. “In a world where the concept of a ‘correction’ almost feels alien and where equities felt like an unstoppable one-way bet for a while, the normality of a setback can feel more painful.”

Worldwide

What began with rising bond yields has become a selloff across global equity markets, as investors fret the return of inflation and higher rates that could erode profitability for companies already trading at elevated prices.

Traders will be watching how the moves unfold from here - a sustained stock slump has the potential to undermine sentiment, crimp borrowing and so start to curtail global growth.

Elsewhere, oil slumped for a third day and metals joined the selloff after gaining on Monday. Bitcoin tumbled for a sixth day, at one point trading below $6 000 for the first time since October.

Stocks

The Stoxx Europe 600 Index sank 1.9% as of 9:59 am London time, hitting the lowest in five months with its seventh consecutive decline and the largest tumble in more than 19 months.

Futures on the S&P 500 Index fell less than 0.1%. The MSCI Asia Pacific Index sank 3.4% to the lowest in almost six weeks on the largest tumble in more than 19 months.

The U.K.’s FTSE 100 Index decreased 1.9%, reaching the lowest in almost 10 months on its sixth consecutive decline and the biggest dip in almost 10 months. The MSCI Emerging Market Index sank 2.9% to the lowest in five weeks on the largest tumble in 15 months.

Currencies

The Bloomberg Dollar Spot Index dipped 0.1%. The euro jumped 0.3% to $1.2402. The British pound gained 0.2% to $1.3991. The Japanese yen climbed 0.1% to 109.00 per dollar, the strongest in a week.

South Africa’s rand jumped 0.5 percent to 12.0667 per dollar. The MSCI Emerging Markets Currency Index fell 0.1% to the lowest in two weeks.

Bonds

The yield on 10-year Treasuries climbed two basis points to 2.73%. Germany’s 10-year yield dipped five basis points to 0.69%, the lowest in a week on the largest decrease in more than two months. Britain’s 10-year yield declined five basis points to 1.506%, the lowest in a week on the biggest drop in almost five weeks.

Commodities

West Texas Intermediate crude decreased 0.7% to $63.70 a barrel, the lowest in more than two weeks. Gold rose 0.3% to $1,343.10 an ounce.

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s&p  |  nyse  |  stock market  |  rand  |  dollar
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