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18 August 2017
 |
Hong Kong Financial Markets (The Total Investment & Insurance
Solutions)
An aversion to risk was evident in financial markets Friday after the
attacks in Spain. Stock markets around the world were under pressure while
traditional safe haven assets, such as gold, were in demand.
KEEPING SCORE: In Europe, the FTSE 100 index
of leading British shares was down 1 percent at 7,316 while France's CAC 40
fell 1.1 percent to 5,089. Germany's DAX was 0.5 percent lower at 12,137. Wall
Street was poised for a subdued opening with Dow futures and the broader
S&P 500 futures down 0.1 percent.
BARCELONA ATTACK: The source of the risk
aversion gripping markets particularly in Europe was the attacks in Spain. On
Friday, police shot and killed five people wearing fake bomb belts who staged a
deadly car attack in Cambrils, a seaside resort in Spain's Catalonia region,
just hours after a van plowed into pedestrians on a busy Barcelona promenade.
Spanish authorities said the back-to-back vehicle attacks — as well as an
explosion earlier this week in a house elsewhere in Catalonia — were related
and the work of a large terrorist group. In total, 14 people were killed in the
attacks, 13 in Barcelona and one in Cambrils. The Total Investment & Insurance Solutions
TRUMP TROUBLE: More uncertainty over
developments in the White House also added to investor pessimism. President
Donald Trump abandoned his plans to form an infrastructure advisory council, a
day after the administration said it would close down two other advisory
councils made up primarily of business leaders. The White House was also forced
to issue a statement dispelling swirling rumors that Gary Cohn, head of the
National Economic Council, was stepping down, saying they were "100
percent false."
ANALYST TAKE: "We're seeing risk
aversion in the markets again on Friday, with the possibility of a
self-inflicted crisis within Donald Trump's White House and another terror
attack, this time in Barcelona, weighing on risk appetite," said Craig
Erlam, senior market analyst at OANDA. The
Total Investment & Insurance Solutions
RISK: Risk aversion traditionally sees
supposedly risky assets such as stocks come under pressure, while supposed safe
havens, such as gold and the Swiss franc, garner support. The precious metal
was up 0.7 percent at $1,300 an ounce. The
Total Investment & Insurance Solutions
ASIAN SCORECARD: Japan's benchmark Nikkei 225
index lost 1.2 percent to close at 19,470.41 and South Korea's Kospi shed 0.1
percent to 2,358.37. Hong Kong's Hang Seng sank 1.1 percent to 27,047.57, while
the Shanghai Composite index ended flat at 3,268.72. Australia's S&P/ASX
200 fell 0.6 percent to 5,747.10.
CURRENCIES: The euro was up 0.2 percent at
$1.1741 while the dollar fell 0.4 percent to 109.08 yen.
ENERGY: Oil prices were little changed, with
the benchmark New York rate up 9 cents at $47.18 a barrel. Brent, the
international standard, was 8 cents firmer at $51.11 a barrel.The Total Investment & Insurance
Solutions
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