terça-feira, 9 de fevereiro de 2016

Investors dump stocks, seek safe havens as bank fears flare / Growth worries, rate hike uncertainty pull Wall Street down

Investors dump stocks, seek safe havens as bank fears flare

Asian share markets were scorched on Tuesday as stability concerns put a torch to European bank stocks and sent investors stampeding to only the safest of safe-haven assets.

As fear overwhelmed greed, yields on longer-term Japanese bonds fell below zero for the first time, the yen surged to a 15-month peak and gold reached its most precious since June.

Japanese Finance Minister Taro Aso felt moved enough to warn the yen's rise was "rough", something of an understatement as the Nikkei .N225 nosedived 5.4 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1.2 percent, with Australian shares hitting 2-1/2-year closing low, and would have been lower if not for holidays in many centres.

Spread-betters see another weak session in European shares, where German DAX .GDAX is seen falling 0.7 percent and Britain's FTSE .FTSE 0.5 percent.

S&P 500 e-mini futures ESc1 fell more than 1 percent at one point.

"Sentiment towards risk assets remained extremely bearish and price action reflected a market that may be capitulating," said Jo Masters, a senior economist at ANZ.

All of which magnified the stakes for U.S. Federal Reserve Chair Janet Yellen's testimony this week.

"She needs to come across as optimistic without being too hawkish and cautious without being negative," said Masters. "Hawkishness or dovishness could easily exacerbate the current sell-off, tightening financial conditions further."

Wall Street pared losses but still ended deep in the red. The Dow .DJI lost 1.1 percent, while the S&P 500 .SPX fell 1.42 percent and the Nasdaq .IXIC 1.82 percent. [.N]

The rout began in Europe on Monday, when the FTSEurofirst 300 .FTEU3 index shed 3.4 percent to its lowest since late 2013, led by a near 6 percent dive in the banking sector .SX7P.

Deutsche Bank (DBKGn.DE) alone sank 9.5 percent as concerns mounted about its ability to maintain bond payments. Late Monday, the German bank said it has "sufficient" reserves to make due payments this year on AT1 securities.

The cost of insuring bank debt against default also climbed to its highest since late 2013. Borrowing costs in Spain, Portugal and Italy jumped as investors demanded a fatter risk premium over safer German paper, where two-year yields hit record lows at minus 52 basis points.


"The 'fear factor' in markets has morphed from being about an emerging market hard-landing and collapsing oil prices to being about the extent of the slowdown in the developed world and the ability of central banks to reflate asset values yet again," analysts at Citi said in a note.

The Bank of Japan's recent shift to negative rates has fuelled concerns that ever-more exotic monetary policy is rapidly reaching the point of diminishing returns.

Yet murmurings about the risk of recession in the United Sates has also led investors to wager the Federal Reserve will have to slow, or suspend altogether, plans to normalise rates.

Futures markets have priced out any chance of a hike in March and imply a funds rate of just 0.43 percent by December <0>. The current effective funds rate is 0.38 percent.

That has pulled down 10-year Treasury yields to their lowest since early 2015 at 1.69 percent US10YT=RR and undermined bullish bets on the U.S. dollar.

It touched a six-week trough on the Swiss franc CHF=, while the euro edged up to $1.1217 EUR=. Against a basket of currencies, the dollar eased 0.1 percent to 96.485 .DXY.

By the far the biggest mover was the yen, long considered a safe haven given Japan's position as the world's top creditor nation.

The dollar dived as far as to 114.205 yen JPY=, having been above 121 just a week ago, while the euro fell as much as one percent to 128.31 yen EURJPY=.

The yield on Japan's benchmark 10-year government bond JP10YTN=JBTC turned negative for the first time as the Nikkei stock index tumbled.

The 10-year JGB yield touched minus 0.010 percent. It was the first time a G7 nation's 10-year government bond yield has turned negative, although yields on German bunds have come relatively close.

With more and more sovereign bonds paying negative rates, the relative cost of holding gold has seemed less and less of a burden. The metal XAU= reached its strongest since June at $1,200.60 an ounce, and last traded at $1,193.60.

Oil prices bounced slightly after three sessions of losses. Brent futures LCOc1 added 11 cents to $32.99 a barrel, while U.S. crude CLc1 rose 34 cents at $30.03.

(Additional reporting by Hideyuki Sano in TOKYO; Reporting by Wayne Cole; Editing by Eric Meijer and Kim Coghill)

Markets | Mon Feb 8, 2016 5:41pm EST
Growth worries, rate hike uncertainty pull Wall Street down

U.S. stocks dropped on Monday as concern over global growth hit banks and other economically sensitive shares, although a late rally in energy shares left the market well above its lows of the day.

European banks led a global selloff in financial stocks as signs of stress in the sector mounted.

Uncertainty over whether the Federal Reserve would raise rates this year also dragged down U.S. bank stocks, pushing the S&P financial index .SPSY down 2.6 percent.

The index is off 14.6 percent for the year, the worst-performing of the 10 major S&P sectors. It is down more than 20 percent from its July 2015 high, confirming the sector is in the grip of a bear market.

"Investors' attitudes seem to be worsening relative to the likelihood of a global recession. I think that's what financials are reflecting – that their net interest margins are going to be further compressed under collapsing bond yields," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

The yield on the 10-year Treasury note US10YT=RR fell to a one-year low.

Shares of Morgan Stanley (MS.N) slid 6.9 percent in their largest one-day drop since November 2012, while rival Goldman Sachs (GS.N) fell 4.6 percent. Both closed at their lowest since 2013.

Facebook Inc (FB.O), Amazon.com Inc (AMZN.O) and other technology stocks that had lent strength to the market last year extended their decline from Friday. Fund managers said last year's outsized gains among some Internet stocks made them the first choice to sell now.

Sharp selling in the beaten-down energy sector reversed late in the session, leaving the S&P energy index .SPNY up 0.1 percent and S&P 500 well off its lows of the day.

But Chesapeake Energy (CHK.N) ended down 33.3 percent at $2.04 after sources told Reuters that the natural gas company had tapped existing adviser Kirkland & Ellis to explore restructuring options. Chesapeake said it has no plans to pursue a bankruptcy.

The Dow Jones industrial average .DJI closed down 177.92 points, or 1.1 percent, at 16,027.05, the S&P 500 .SPX lost 26.61 points, or 1.42 percent, to end at 1,853.44 and the Nasdaq Composite .IXIC dropped 79.39 points, or 1.82 percent, to 4,283.75.

Falling oil prices along with concern over a worsening global growth outlook have caused a sharp selloff in stocks this year. Investors have been searching for a catalyst that might change the market's course.

"I don’t know if we've seen any tangible evidence of a turn in any macro economic conditions that would warrant a firm bottoming," Luschini said, noting the selloff in financials.

Adding to recent woes for the tech sector, Cognizant (CTSH.O) dropped 7.7 percent to $54.05 after the IT services provider issued a weak sales forecast.

Amazon fell 2.8 percent while Facebook dropped 4.2 percent.

Volume was heavy. About 10.6 billion shares changed hands on U.S. exchanges, above the 9.4 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Declining issues outnumbered advancing ones on the NYSE by 2,484 to 618; on the Nasdaq, 2,029 issues fell and 804 advanced. The S&P 500 posted 7 new 52-week highs and 97 new lows; the Nasdaq recorded 4 new highs and 495 new lows.

(Additional reporting by Abhiram Nandakumar in Bengaluru and Marcus E. Howard in New York; Editing by Savio D'Souza, Nick Zieminski and Bill Rigby)

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