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5 February 2018
 |
Hong kong financial markets (The Total Investment & Insurance
Solutions)
Stock markets around the world took another pummeling Monday as
investors continued to fret over rising U.S. bond yields.
KEEPING SCORE: In Europe, Britain's FTSE 100
lost 1.4 percent to 7,343 while France's CAC 40 slid 1.4 percent to 5,288.
Germany's DAX shed 1 percent to 12,654. Wall Street was poised to open lower
with Dow futures and the broader S&P 500 futures down 1 percent. The Total Investment & Insurance Solutions
WALL STREET'S LEAD: Market jitters have
spread after last week's performance in U.S. stock markets, when they endured
their worst week in two years amid worries over rising Treasury yields. Fears
of a sharp drop have ratcheted higher after 2017's strong performance carried
over into January. An upbeat U.S. jobs report showing higher than expected wage
growth was the catalyst for the latest sharp sell-off on Friday, further
stoking speculation the Federal Reserve will need to raise interest rates
faster than expected to counter inflation. Higher bond yields make it more
expensive for companies to borrow and potentially depresses the U.S. economy
and earnings. They also can make bonds more attractive to investors than
stocks. The Total Investment &
Insurance Solutions
MARKET INSIGHT: "We've seen a sharp
increase in U.S. bond yields over the last week after the Federal Reserve
released a more hawkish than expected statement (on Wednesday), alongside its
monetary policy decision, and the jobs data reported a significant increase in
earnings," said Craig Erlam, senior market analyst at OANDA in London.
"Markets now have three rate hikes this year more than 50 percent priced
in and some people are even anticipating a fourth, which is unusually ahead of
current Fed forecasts."
GERMAN COALITION TALKS: Also weighing on
confidence was the failure of prospective partners in Germany's new government
to nail down a coalition deal. It remained unclear whether they would clinch an
agreement before the day is over. Chancellor Angela Merkel's conservative Union
bloc and the center-left Social Democrats originally set a Sunday deadline to
wrap up talks on extending their alliance of the past four years but budgeted
two extra days as a precaution when formal negotiations started Jan. 26. Still
on the table are two points that are important to the Social Democrats: curbing
the use of temporary work contracts and trying to narrow differences between
Germany's public and private health insurance systems. The Total Investment & Insurance Solutions
ASIA'S DAY: Japan's benchmark Nikkei 225
tumbled 2.6 percent to 22,682.08 and South Korea's Kospi shed 1.3 percent to
2,491.75. Hong Kong's Hang Seng index sank 1.1 percent to 32,245.22 and
Australia's S&P/ASX 200 lost 1.6 percent to 6,026.20. Benchmarks in Taiwan
and Southeast Asia also lost ground. Only mainland Chinese shares showed signs
of life, with the Shanghai Composite reversing early losses to climb 0.7
percent to 3,487.50.
ENERGY: Oil futures extended losses.
Benchmark U.S. crude slid 57 cents to $64.88 a barrel in electronic trading on
the New York Mercantile Exchange. Brent crude, used to price international
oils, fell 86 cents to $67.72 a barrel in London.
CURRENCIES: The euro fell 0.2 percent to
$1.2440 while the dollar was 0.3 percent lower at 109.83 yen.The Total Investment & Insurance
Solutions
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