🎁 💸 Warren Buffett's Top Picks Are Up +49.1%. Copy Them to Your Watchlist – For FreeCopy Portfolio

GLOBAL MARKETS-Fed alert: World stocks drop as investors digest U.S. rate rise

Published 2015-12-18, 07:56 a/m
© Reuters.  GLOBAL MARKETS-Fed alert: World stocks drop as investors digest U.S. rate rise
EUR/USD
-
USD/JPY
-
XAU/USD
-
SOGN
-
GC
-
LCO
-
ESM24
-
CL
-
FTEU3
-
MSCIEF
-
MIAPJ0000PUS
-
DXY
-

* Wall Street set to follow Europe, Asia stocks lower
* U.S. crude hits lowest level since 2009
* Emerging markets erase post-Fed gains

(Updates prices, adds quote)
By John Geddie
LONDON, Dec 18 (Reuters) - Investors turned cautious on
Friday about what a stronger dollar and weak commodity prices
could mean for the world economy, as a clutch of central banks
moved to cushion the impact of the first U.S. rate rise in
nearly a decade.
Initial relief after the U.S. Federal Reserve enacted a
long-expected hike earlier this week started began to fade, as
declines in global stocks and emerging markets showed that the
move might not pass off as smoothly as hoped.
Wall Street, which has shed all gains made just after the
Fed meeting on Wednesday, was set to open lower, following
earlier falls in European and Asian stocks. ESc1
The dollar weakened but remained on track for its strongest
week since early November, as the price of oil hit its lowest
level seen since early 2009.
"I am still quite bearish about the prospects for the first
quarter of next year. The oil price problems are not going away
any time soon," said Terry Torrison, managing director at
Monaco-based McLaren Securities.
European shares fell from a one-week high reached in the
previous session. The pan-European FTSEurofirst 300 index
.FTEU3 , which had risen 1.3 percent on Thursday, dropped 0.6
percent.
Debt markets built on gains made on Thursday as investors
sheltered in less risky assets. Money markets are pricing in
fewer rate rises next year than the Fed now projects, reflecting
concern about the economy and doubts about significant
inflation. 0#FF
"Equities are all down and bond yields are down - partly
because of stocks, partly because of lower oil, so the move is
global," said Ciaran O'Hagan, a strategist at Societe Generale (PA:SOGN).
Spanish bonds lagged in Europe as the country braced for
its most uncertain election in decades this weekend. GVD/EUR

STIMULUS MOVES
The Bank of Japan on Friday bolstered its massive stimulus
programme to try to counter the impact of the Fed move, setting
up a new programme to buy exchange-traded funds, extend the
maturity of bonds it owns to around 12 years and increase
purchases of risky assets.
In Taiwan, the central bank unexpectedly cut interest rates
for the second time this year.
"The global macro dynamics from the beginning of a Fed rate
hiking cycle are slowly playing out across the world," Angus
Nicholson, market analyst at IG in Melbourne, said in a note to
clients.
"In the direct wake of the decision we have seen some
dramatic moves in central bank policy with Taiwan cutting its
benchmark interest rate, Hong Kong and Mexico both hiking rates,
and Argentina removing currency controls."
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was down 0.6 percent, but still on course to
finish the week up 1.5 percent. Emerging market stocks .MSCIEF
fell 1 percent, back at levels seen before the Fed decision.
Against a basket of other major currencies, the dollar was
up 1.3 percent, headed for its best week since early November,
although it slipped on Friday. .DXY
The dollar sank 1.1 percent against the Japanese currency to
121.16 yen JPY= and weakened against the euro EUR= .
Argentina's peso ARS=RASL plummeted 28 percent on Thursday
after the country's new government lifted long-held restrictions
and floated the currency. President Mauricio Macri has promised
to implement free-market reforms in an attempt to heal the
crisis-ridden economy.
U.S. crude futures CLc1 hit levels not seen in nearly
seven years on Friday at $34.50 a barrel. Brent crude LCOc1
was headed for its third week of losses, down 0.6 percent at
$36.84.
Gold edged up slightly from Thursday, when it suffered its
biggest slide in five months. Spot gold XAU= rose 0.4 percent,
after tumbling 2 percent on Thursday, and is down 1.7 percent
for the week.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.