World shares tumble on impatience over Trump policies; euro gains
Reuters
Published Mar 21, 2017 12:23PM ET
World shares tumble on impatience over Trump policies; euro gains
By Sam Forgione
NEW YORK (Reuters) - U.S. and European shares tumbled on Tuesday on concerns that higher interest rates and pro-growth U.S. policies were on hold, boosting safe-haven Treasuries and gold prices, while the euro hit a more than six-week high against the dollar on soothed French election worries.
The U.S. S&P 500 financial sector (SPSY) fell more than 2 percent and was on track for its biggest daily plunge in two months. Analysts attributed the selling to reduced confidence that U.S. President Donald Trump's pro-growth policies, including financial deregulation, would occur soon, and to concerns of a dovish Federal Reserve.
The Fed stuck to its outlook for two more hikes this year last week, instead of the three expected by many market participants.
The tech-heavy U.S. Nasdaq Composite fell more than 1.3 percent after hitting a record intraday high earlier on the back of Apple (O:AAPL) shares, which briefly touched a record $142.80 a share. Europe's broad FTSEurofirst 300 (FTEU3) stock index also fell after earlier hitting a 15-month high.
"Led by financials and industrials, the stock selloff suggests that investors may be less confident that the Trump administration’s pro-growth announcements will be translated into policy implementation soon," said Mohamed El-Erian, chief economic adviser at Allianz (DE:ALVG) in Newport Beach, California.
MSCI's all-country world equity index (MIWD00000PUS) was last down 1.81 points, or 0.4 percent, at 449.25.
The Dow Jones Industrial Average (DJI) fell 157.17 points, or 0.75 percent, to 20,748.69. The S&P 500 (SPX) lost 18.33 points, or 0.77 percent, to 2,355.14. The Nasdaq Composite (IXIC) dropped 62.08 points, or 1.05 percent, to 5,839.45.
Europe's broad FTSEurofirst 300 index (FTEU3) dropped 0.54 percent to 1,480.27.
The euro
The euro gained on relief over the debate results, since a win by the far-right Le Pen is seen as posing a risk of euro zone break-up.
"Any news between now and the French election next month that suggests fading risk of a Le Pen victory would probably be supportive of the euro," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
U.S. crude oil prices hit a one-week low of $47.50 a barrel as the market discounted the latest talk by OPEC that it would extend output cuts beyond June.
Brent crude (LCOc1) was last down 31 cents, or 0.6 percent, at $51.31 a barrel. U.S. crude (CLc1) was down 50 cents, or 1.04 percent, at $47.72 per barrel.
Get The News You Want
Safe-haven spot gold and U.S. Treasuries benefited, with gold hitting a more than two-week high of $1,243.80 an ounce and benchmark 10-year U.S. Treasury yields (US10YT=RR) touching a nearly three-week low of 2.425 percent.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.