August 28, 2014 / 4:05 PM / 3 years ago

GLOBAL MARKETS-Stocks, bond yields fall as Ukraine crisis deepens

* S&P 500 index sinks below 2,000 after record close
    * Traders focus on weak European data, brush off upbeat U.S.
GDP
    * Bund yields hit new lows, U.S. 30-year yield lowest in 14
months
    * Gold rises 3rd day on safe-haven bids, oil prices steady

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Aug 28 (Reuters) - Stock markets around the world
fell on Thursday after Ukraine said Russia moved more troops
into the country, escalating the risk of the region's crisis
spreading, as nervous investors shifted money into gold and U.S.
and German government bonds.
    The euro hit a 21-month low against the Swiss franc and fell
against the yen as worries about intensified fighting between
the Ukrainian military and pro-Russian separatists drove
investors to seek safe-haven currencies. 
    Ukrainian President Petro Poroshenko said Russian forces had
entered Ukraine, and he convened his security and defense
council to decide how to respond. 
    "Geopolitics is driving the market again, and this latest
escalation in Ukraine comes as European stocks were ripe for a
pull-back," said Alexandre Baradez, chief market analyst at IG
France.
    The tensions put riskier assets firmly under pressure with
the Standard & Poor's 500 index falling below the 2,000
threshold following a record close on Wednesday.
    In midday U.S. trading, The Dow Jones industrial average
 fell 52.24 points, or 0.31 percent, to 17,069.77, the S&P
500 shed 3.99 points, or 0.2 percent, to 1,996.13 and the
Nasdaq Composite declined 10.15 points, or 0.22 percent,
to 4,559.47. 
     The pan-European FTSEurofirst 300 index snapped
its three-day winning streak, falling 0.7 percent at 1,369.15
points. Tokyo's Nikkei closed down 0.5 percent at 15,459.86.
  
     The MSCI world equity index, which tracks
shares in 45 nations, fell 1.81 points or 0.42 percent, to
430.44.
     Meanwhile, ten-year German Bund yields hit a
record low of 0.868 percent, and 30-year U.S. bond yields
 touched 3.059 percent, the lowest in 14 months.
  
    Bond yields worldwide have fallen in recent days as traders
bet on new stimulus from the European Central Bank as soon as
next week in a bid to avert deflation in the euro zone. 
    German inflation came in at a steady 0.8 percent ahead of
Friday's euro zone number. Corresponding Spanish figures saw a
slightly smaller-than-forecast drop as revised second quarter
GDP held steady.  
    These weak inflation readings overshadowed an upwardly
revised U.S. second-quarter economic growth reading.
 
 
    In the currency market, the dollar and euro softened against
safehaven yen, though the greenback retraced much of its earlier
decline on the surprise upward GDP revision. 
    The dollar was down 0.05 percent to 103.79 yen but
flat against the Swiss franc at 0.9148 franc.
    The euro fell 0.3 percent to 136.62 yen and
declined 0.1 percent versus the Swiss franc to 1.2055 francs
, close to a 21-month low. 
    Safe-haven demand pushed spot gold prices higher for a third
day, rising 0.5 percent at 1,289.50 an ounce. 
    London oil prices held above their recent 14-month lows on
short-term supply concerns. Brent crude for October
delivery was last up 19 cents or 0.18 percent at $102.91 a
barrel, while U.S. crude futures were up 72 cents or 0.77
percent, at $94.60 per barrel. 

 (Additional reporting by Karen Brettell in New York; Marc
Jones, Sujata Rao and Marius Zaharia in London; Editing by John
Stonestreet and Meredith Mazzilli)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below