Daily Financial Markets Report: Thursday 30 January 2014

sacciDaily Financial Markets Report sources information from Business Day, Reuters, JSE Ltd and others.

Highlights

 U.S. stocks fell 1% on Wednesday; extending losses after the Fed announced it will reduce monthly bond purchases by another $10 billion and failed to mention the recent emerging markets turmoil that has knocked U.S. stocks off their highs. European stock markets moved lower on Wednesday as rate hikes in Turkey and South Africa failed to calm jitters over volatility in emerging markets and investors instead turned their attention to the outcome of the U.S. Federal Reserve Meeting. In Asian markets, Hong Kong stocks sold off this morning after the Federal Reserve decided to further taper stimulus, and after a final reading of China’s manufacturing PMI contracted. Japanese equities dropped sharply early, retreating after U.S. stocks fell in the wake of further tapering of stimulus by the Federal Reserve, and as the U.S. dollar declined against the Japanese yen.

 The US dollar is currently trading at 1.36 to the euro, 1.66 to the pound and will buy 102.37 Japanese Yen or 11.23 South African Rand.

 Spot gold is currently trading at US$ 1 263.40/oz. and platinum at US$ 1 412.80/oz. Brent crude oil is currently trading at US$ $ 107.71 per barrel.

International markets

U.S. stocks fell 1% on Wednesday; extending losses after the Fed announced it will reduce monthly bond purchases by another $10 billion and failed to mention the recent emerging markets turmoil that has knocked U.S. stocks off their highs. European stock markets moved lower on Wednesday as rate hikes in Turkey and South Africa failed to calm jitters over volatility in emerging markets and investors instead turned their attention to the outcome of the U.S. Federal Reserve Meeting. In Asian markets, Hong Kong stocks sold off this morning after the Federal Reserve decided to further taper stimulus, and after a final reading of China’s manufacturing PMI contracted. Japanese equities dropped sharply early, retreating after U.S. stocks fell in the wake of further tapering of stimulus by the Federal Reserve, and as the U.S. dollar declined against the Japanese yen.

The S&P 500 closed 1%, lower at 1 774.20, falling below the key resistance level of 1 775 to its lowest close since mid-November. The Dow Jones Industrial Average fell 1.2% to 15 738.79, recording its fifth triple-digit loss this month. The Nasdaq Composite lost 1.1%, to close at 4 051.43

The Stoxx Europe 600 index dropped 0.6% to close at 322.38, after trading as high as 328.02 earlier in the day. Among country-specific indexes, France’s CAC 40 index dropped 0.7% to 4 156.98 and the U.K.’s FTSE 100 index slipped 0.4% to 6 544.28. Germany’s DAX 30 index fell 0.8% to 9 336.73.

The Hang Seng Index sank 1.5% to 21 815.04 in holiday-shortened trading. On the mainland, the Shanghai Composite Index gave up 0.5%. The Nikkei Stock Average fell 2.6% to 14 990.50, and the broader Topix lost 2.1% at 1 229.65.

The US dollar is currently trading at 1.36 to the euro, 1.66 to the pound and will buy 102.37 Japanese Yen or 11.23 South African Rand.

Domestic markets

The JSE reversed course on Wednesday following a surprise interest rate hike‚ knocking sectors that service consumers. The JSE All Share index ended 0.35% lower at 45 564.62 points‚ despite having been up as much as 1.47% earlier in the day. Banks and financial indices lost 2.83% and 2.14% respectively while the gold mining index shot up 5.07%.

The benchmark R186 was trading at 8.690% from its previous close of 8.700% on Tuesday. The R157 was trading at 6.750% from 6.685% at its previous close‚ while the R207 was bid at 8.125% and offered at 8.105% from a close of 8.110%.

Commodities

Spot gold is currently trading at US$ 1 263.40/oz. and platinum at US$ 1 412.80/oz. Brent crude oil is currently trading at US$ $ 107.71 per barrel.

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