European & US stocks fall in view of Greek vote, Asian equities & stocks drop due to concerns in Chi
July 7, 2015 7:13 am
A majority of Asian equity indices dropped overnight, bar Japans Nikkei 225 which closed up 1.31%. Chinese equity markets went into a fresh tailspin, investors nerves already anxious by uncertainty hanging over the future of Greece’s membership in the European Union currency block.
Chinese stocks fell more than 5 percent at one point despite unprecedented steps last weekend to help stabilize the tumbling market, with the CSI 300 index falling to near four-month lows.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6 percent, led by Hong Kong and South Korea, though markets in developed countries fared better.
Asian assets were also burdened by rising concerns over massive losses in Chinese equity markets over the last few weeks, which are beginning to raise fears of addition damage to the already slowing economy and questions over the government’s policy decisions. Trading remained highly volatile even after emergency measures from Beijing to help stall the decline is equities, under which brokerages and fund managers vowed to buy massive amounts of stocks, helped by China’s state-backed margin finance company, which in turn would be aided by a direct line of liquidity from the central bank.
European and U.S. stocks fell on Monday after Greeks voted overwhelmingly to reject more austerity. In addition European Central Bank made it harder for Greece’s banks to access emergency loans, adding pressure on a country whose financial system remains shuttered as it awaits political talks in Brussels.
While the ECB’s Governing Council agreed in a conference call to leave the cap on ELA (Emergency Liquidity Assistance) unchanged at 88.6 billion Euros ,the change in collateral terms represents a stricter policy overall. That signals officials views that the country’s lenders, are at greater risk of default since voters in Greece’s referendum on Sunday delivered a decisive no to creditors’ bailout terms. For now, investors are holding out hope that Greece will manage to strike a deal with its creditors and prevent an exit from the Eurozone
In the currency markets the euro rebounded from Monday’s one-week low to fetch $1.1044 against its US counterpart while the yen, initially bought as a safe-haven play, pulled back to 122.71 to the dollar from Monday’s high of 121.70., the Australian dollar fell to a six-year low of $0.7452 on Monday and last stood at $0.7480.
Over in the commodities markets, London copper fell to a fresh five-month low of $5,512 a ton, falling as much as 1.4 percent on fears of an ever slowing Chinese economy. Oil prices also steadied after having suffered its biggest sell off in five months on Monday. U.S. crude fell 7.7 percent on Monday, hitting a three-month low of $52.41 a barrel and last stood at $53.03, up 1.0 percent from late U.S. levels. Brent also shed 6.3 percent on Monday to $56.40
Over in the UK Equity markets MARKS & SPENCER – The British retailer said underlying sales in its non-food business slipped in its first quarter, a setback for the group after a return.
A majority of Asian equity indices dropped overnight, bar Japans Nikkei 225 which closed up 1.31%. Chinese equity markets went into a fresh tailspin, investors nerves already anxious by uncertainty hanging over the future of Greece’s membership in the European Union currency block.
Chinese stocks fell more than 5 percent at one point despite unprecedented steps last weekend to help stabilize the tumbling market, with the CSI 300 index falling to near four-month lows.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6 percent, led by Hong Kong and South Korea, though markets in developed countries fared better.
Asian assets were also burdened by rising concerns over massive losses in Chinese equity markets over the last few weeks, which are beginning to raise fears of addition damage to the already slowing economy and questions over the government’s policy decisions. Trading remained highly volatile even after emergency measures from Beijing to help stall the decline is equities, under which brokerages and fund managers vowed to buy massive amounts of stocks, helped by China’s state-backed margin finance company, which in turn would be aided by a direct line of liquidity from the central bank.
European and U.S. stocks fell on Monday after Greeks voted overwhelmingly to reject more austerity. In addition European Central Bank made it harder for Greece’s banks to access emergency loans, adding pressure on a country whose financial system remains shuttered as it awaits political talks in Brussels.
While the ECB’s Governing Council agreed in a conference call to leave the cap on ELA (Emergency Liquidity Assistance) unchanged at 88.6 billion Euros ,the change in collateral terms represents a stricter policy overall. That signals officials views that the country’s lenders, are at greater risk of default since voters in Greece’s referendum on Sunday delivered a decisive no to creditors’ bailout terms. For now, investors are holding out hope that Greece will manage to strike a deal with its creditors and prevent an exit from the Eurozone
In the currency markets the euro rebounded from Monday’s one-week low to fetch $1.1044 against its US counterpart while the yen, initially bought as a safe-haven play, pulled back to 122.71 to the dollar from Monday’s high of 121.70., the Australian dollar fell to a six-year low of $0.7452 on Monday and last stood at $0.7480.
Over in the commodities markets, London copper fell to a fresh five-month low of $5,512 a ton, falling as much as 1.4 percent on fears of an ever slowing Chinese economy. Oil prices also steadied after having suffered its biggest sell off in five months on Monday. U.S. crude fell 7.7 percent on Monday, hitting a three-month low of $52.41 a barrel and last stood at $53.03, up 1.0 percent from late U.S. levels. Brent also shed 6.3 percent on Monday to $56.40
Over in the UK Equity markets MARKS & SPENCER – The British retailer said underlying sales in its non-food business slipped in its first quarter, a setback for the group after a return.
Market Commentary by Richard Perry
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