Stocks Decline in Risk-Off Turn; Yen Rises: Markets Wrap - Yahoo Finance

Stocks Decline With U.S. Futures; Treasuries Rise: Markets Wrap

(Bloomberg) -- European stocks dropped alongside U.S. equity futures on Tuesday, tracking broad declines across Asia amid a series of negative developments in Hong Kong and worries about a deadly virus in China.

The Stoxx Europe 600 Index fell a second day, with financial firms among the biggest losers after UBS Group AG missed key profitability and cost targets, sending the shares down nearly 6%. Contracts on the three main U.S. equity benchmarks all pointed to a drop when Wall Street returns from the long weekend. Asian markets set the tone, with shares in Hong Kong slumping after a slew of negative headlines, from a credit rating downgrade and violent clashes at the weekend to a top official calling for new security legislation and mounting fears over the outbreak of a new coronavirus in the region.

The risk-off mood helped spur traditional haven assets, and the yen and Treasuries advanced while gold was steady. China’s yuan weakened by the most in three months.

Read more: China Virus Concern Hammers Asian Stock Sentiment

The emergence of the illness in China is stirring memories of the SARS outbreak 17 years ago for some market watchers, though it’s not yet as serious. Still, easing trade tensions, a solid start to earnings season and signs global growth is bottoming have all combined to stoke stocks to multiple records this month; for many investors it may be time for a pause.

“For the market, the more meaningful driver still remains the economic cycle and earnings momentum,” Fan Cheuk Wan, Asia chief market strategist at HSBC Private Bank, said on Bloomberg TV. “Based on previous experience we have come across during SARS, the impact of the virus is likely to be short lived.”

Elsewhere, the Bank of Japan kept policy unchanged as expected, though raised its economic growth forecast for 2020. Oil dipped below $65 a barrel as ample global supplies offset the loss of exports from Libya.

Here are some events to watch out for this week:

Companies including Netflix, IBM, Procter & Gamble and Hyundai will post results.Policy decisions are due from central banks in Canada, Indonesia and the Europe.The World Economic Forum, the annual gathering of global leaders in politics, business and culture, opens in Davos, Switzerland.

These are the main moves in markets:

Stocks

Futures on the S&P 500 Index declined 0.3% from Friday’s close as of 8:03 a.m. London time.The Stoxx Europe 600 Index decreased 0.7%.The MSCI Asia Pacific Index fell 1%.

Currencies

The Bloomberg Dollar Spot Index gained 0.1%.The euro was little changed at $1.1096.The British pound was little changed at $1.3005.The Japanese yen gained 0.2% to 109.97 per dollar.

Bonds

The yield on 10-year Treasuries dipped two basis points to 1.80%.Germany’s 10-year yield fell one basis point to -0.22%.Britain’s 10-year yield decreased one basis point to 0.643%.

Commodities

West Texas Intermediate crude dipped 0.8% to $58.06 a barrel.Gold was little changed at $1,560.73 an ounce.

--With assistance from Livia Yap, Eric Lam and Ranjeetha Pakiam.

To contact the reporters on this story: Cormac Mullen in Tokyo at cmullen9@bloomberg.net;Sam Potter in London at spotter33@bloomberg.net

To contact the editors responsible for this story: Sam Potter at spotter33@bloomberg.net, Yakob Peterseil, Ravil Shirodkar

For more articles like this, please visit us at bloomberg.com

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2020-01-21 05:50:56Z
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