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13 Aug 2018
 |
| Hong kong financial markets (The Total Investment & Insurance Solutions) |
Global stock prices sank Monday as Turkey's financial turmoil fueled
fears of contagion in other emerging markets.
KEEPING SCORE: Germany's DAX declined 0.6 percent to 12,346 and London's
FTSE 100 retreated 0.5 percent to 7,625. France's CAC 40 lost 0.2 percent to
5,401. On Wall Street, futures for the Standard & Poor's 500 index and Dow
Jones industrial averages were down 0.3 percent.
ASIA'S DAY: The Shanghai Composite Index fell 0.3 percent to 2,785.87
and Tokyo's Nikkei 225 lost 2 percent to 21,857.43. Hong Kong's Hang Seng
retreated 1.5 percent to 27,936.57 and Seoul's Kospi was 1.5 percent lower at
2,248.45. Sydney's S&P-ASX 200 shed 0.4 percent to 6,252.20 and India's
Sensex was off 0.2 percent at 33,755.14. Benchmarks in New Zealand, Taiwan and
Southeast Asia also declined. The Total
Investment & Insurance Solutions
TURKISH TURMOIL: Investors question whether President Recep Tayyip
Erdogan's government can cope with a plunging currency, a diplomatic spat with
Washington and other economic problems. Erdogan has accumulated more and more
control over Turkey's financial system and does not want the central bank to
raise interest rates — though independent economists say that's needed to
support the currency. U.S. President Donald Trump said Friday he will authorize
higher tariffs on Turkish steel and aluminum. Erdogan has remained defiant,
making investors increasingly nervous.
ANALYST'S TAKE: "Turkey's financial crisis has taken center stage,
displacing trade wars as the immediate concern," said Eugene Leow of DBS
Group in a report. Worries are building that "this may lead to
contagion" across emerging markets, said Leow. "We fail to see how
the crisis can be resolved without external support," but an International
Monetary Fund support package will be difficult "given Turkey's current
political situation."
CURRENCIES: Turkey's currency fell another 8 percent on Monday, bringing
its losses this year to 46 percent. Other developing countries have seen their
currencies hit amid the questions over Turkey. The South African rand was down
almost 3 percent. The dollar, which had risen Friday as investors bought as a
safe haven, edged back to 110.34 yen from Friday's 110.93. The euro fell to
$1.1382 from $1.1411. The Total
Investment & Insurance Solutions
ENERGY: Benchmark U.S. crude fell 29 cents to $67.34 per barrel in
electronic trading on the New York Mercantile Exchange. Brent crude lost 7
cents to $72.74 in London. It closed at $72.83 the previous session.The Total Investment & Insurance
Solutions
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