Stocks pullback as havens sought on Crimea; Gold, Oil hike
March 4, 2014 10:14 am
Stocks backslide, with an index of global equities plunging down the most in a month, while the ruble losses stability to an all-time low as Russia’s growing military presence in Ukraine triggered an emerging-market selloff. The yen, U.S. Treasuries and gold rallied as investors sought havens.
The MSCI All-Country World Index sagged down 1.2 percent by 4:44 p.m. in New York. Russian stocks plummeted the most in five years and Ukrainian debt declined the most on record as the ruble slumped more than 1 percent against its dollar-euro basket. The Standard & Poor’s 500 Index gave up 0.7 percent as the VIX volatility gauge leaped. Gold rallied 2.2 percent as Brent crude increased as much as 3 percent, while wheat surged the most since 2012. Ten-year Treasury yields retreated to a one-month low.
U.S. Secretary of State John Kerry is traveling to Ukraine and the United Nations Security Council is set to meet as western leaders looks to respond to Russia seizing control of the country’s Crimea region. Ukraine stated that Russia’s navy ordered two of its ships to surrender. Russia’s central bank unexpectedly boosted its key interest rate by 150 basis points. Manufacturing gauges in China prompted slower development, while U.S. data showed faster-than-projected factory expansion.
“Ukraine is troubling, but it will be short-term,” Karyn Cavanaugh, a market strategist at ING U.S. Investment Management in New York, said in a phone interview. Her firm oversees about $200 billion. “If we do see some market gyrations and volatility, it could be a buying opportunity. I think that things are going to be coming along that will cause the market to look past it.”
G-7 Condemnation
Kerry’s trip to Kiev, Ukraine’s capital and scene of a bloody uprising that precipitated the latest crisis, comes after the leaders of the Group of Seven nations condemned Russia’s moves as a clear violation of the ex Soviet republic’s territorial integrity. Ukraine was set to become the third-largest corn shipper this year, and currently in the sixth position for global wheat exports.
Moscow’s Micex stock index relinquished 11 percent in its largest decline since November 2008. OAO Gazprom, which supplies natural gas to Europe via Ukraine, slide down 13 percent in Moscow, its largest pullback on a closing basis since November 2008.
The ruble gave up 1.4 percent to a record-low 42.6334 versus the dollar-euro basket used by the central bank to manage the currency. It backslide more than 0.6 percent against all 16 major counterparts tracked by Bloomberg as traders projected the regulator sold about $10 billion of foreign currency to stem the drop.
Increasing Rates
The Russian Volatility Index, which reflects the average worth of implied volatility of options on futures for Russia’s RTS Index, leaped to a record 149 percent to an almost five-year high of 74.46.
Bank Rossii bolstered its one-week auction rate to 7 percent from 5.5 percent, saying it was a temporary boost aimed at stemming inflation and ensuring monetary stability. The cost of insuring Russia’s debt versus non-payment rallied to the peak performing mark since June, with credit-default swap contracts on Russian government bonds soaring 46.5 basis points to 235.5 basis points, according to financial values recorded by CMA.
Yields on Ukraine’s dollar-denominated Eurobonds due in 2023 climbed 1.11 percentage points, or 111 basis points, to 10.56 percent. It costs $2.36 million in advance and $500,000 yearly to guard down $10 million of Ukraine’s debt for five years, according to CMA. That’s up from $1.9 million in advance and indicates a 54 percent chance of default during the period, the data show.
Ukraine Assembles
Ukraine yesterday assembles its army after lawmakers in Moscow gave permission for troop deployments. The government is looking as much as $35 billion in support led by the International Monetary Fund to replenish its reserves.
The Ukrainian Equities Index relinquished 12 percent as benchmark gauges in Poland and Hungary surrendered more than 3.5 percent. The MSCI Emerging Markets Index shrank 1.7 percent, the most since January.
The Hang Seng China Enterprises Index of mainland Chinese stocks listed in Hong Kong plummeted 1.4 percent while the Shanghai Composite Index rallied 0.9 percent. China’s Purchasing Managers’ Index (CPMINDX) for February came in at 50.2, according to official data released March 1. That compares with a January level of 50.5. A private PMI by HSBC Holdings Plc and Markit Economics indicated contraction, sliding lower to 48.5 from 49.5. The material has been provided by InstaForex Company – www.instaforex.com
Stocks backslide, with an index of global equities plunging down the most in a month, while the ruble losses stability to an all-time low as Russia’s growing military presence in Ukraine triggered an emerging-market selloff. The yen, U.S. Treasuries and gold rallied as investors sought havens.
The MSCI All-Country World Index sagged down 1.2 percent by 4:44 p.m. in New York. Russian stocks plummeted the most in five years and Ukrainian debt declined the most on record as the ruble slumped more than 1 percent against its dollar-euro basket. The Standard & Poor’s 500 Index gave up 0.7 percent as the VIX volatility gauge leaped. Gold rallied 2.2 percent as Brent crude increased as much as 3 percent, while wheat surged the most since 2012. Ten-year Treasury yields retreated to a one-month low.
U.S. Secretary of State John Kerry is traveling to Ukraine and the United Nations Security Council is set to meet as western leaders looks to respond to Russia seizing control of the country’s Crimea region. Ukraine stated that Russia’s navy ordered two of its ships to surrender. Russia’s central bank unexpectedly boosted its key interest rate by 150 basis points. Manufacturing gauges in China prompted slower development, while U.S. data showed faster-than-projected factory expansion.
“Ukraine is troubling, but it will be short-term,” Karyn Cavanaugh, a market strategist at ING U.S. Investment Management in New York, said in a phone interview. Her firm oversees about $200 billion. “If we do see some market gyrations and volatility, it could be a buying opportunity. I think that things are going to be coming along that will cause the market to look past it.”
G-7 Condemnation
Kerry’s trip to Kiev, Ukraine’s capital and scene of a bloody uprising that precipitated the latest crisis, comes after the leaders of the Group of Seven nations condemned Russia’s moves as a clear violation of the ex Soviet republic’s territorial integrity. Ukraine was set to become the third-largest corn shipper this year, and currently in the sixth position for global wheat exports.
Moscow’s Micex stock index relinquished 11 percent in its largest decline since November 2008. OAO Gazprom, which supplies natural gas to Europe via Ukraine, slide down 13 percent in Moscow, its largest pullback on a closing basis since November 2008.
The ruble gave up 1.4 percent to a record-low 42.6334 versus the dollar-euro basket used by the central bank to manage the currency. It backslide more than 0.6 percent against all 16 major counterparts tracked by Bloomberg as traders projected the regulator sold about $10 billion of foreign currency to stem the drop.
Increasing Rates
The Russian Volatility Index, which reflects the average worth of implied volatility of options on futures for Russia’s RTS Index, leaped to a record 149 percent to an almost five-year high of 74.46.
Bank Rossii bolstered its one-week auction rate to 7 percent from 5.5 percent, saying it was a temporary boost aimed at stemming inflation and ensuring monetary stability. The cost of insuring Russia’s debt versus non-payment rallied to the peak performing mark since June, with credit-default swap contracts on Russian government bonds soaring 46.5 basis points to 235.5 basis points, according to financial values recorded by CMA.
Yields on Ukraine’s dollar-denominated Eurobonds due in 2023 climbed 1.11 percentage points, or 111 basis points, to 10.56 percent. It costs $2.36 million in advance and $500,000 yearly to guard down $10 million of Ukraine’s debt for five years, according to CMA. That’s up from $1.9 million in advance and indicates a 54 percent chance of default during the period, the data show.
Ukraine Assembles
Ukraine yesterday assembles its army after lawmakers in Moscow gave permission for troop deployments. The government is looking as much as $35 billion in support led by the International Monetary Fund to replenish its reserves.
The Ukrainian Equities Index relinquished 12 percent as benchmark gauges in Poland and Hungary surrendered more than 3.5 percent. The MSCI Emerging Markets Index shrank 1.7 percent, the most since January.
The Hang Seng China Enterprises Index of mainland Chinese stocks listed in Hong Kong plummeted 1.4 percent while the Shanghai Composite Index rallied 0.9 percent. China’s Purchasing Managers’ Index (CPMINDX) for February came in at 50.2, according to official data released March 1. That compares with a January level of 50.5. A private PMI by HSBC Holdings Plc and Markit Economics indicated contraction, sliding lower to 48.5 from 49.5.
The material has been provided by InstaForex Company – www.instaforex.com
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