NEW YORK: Global equity markets, crude oil and the euro fell yesterday on fears of a potential banking collapse in Cyprus and signs the economic downturn in Europe is deepening. Several upbeat US economic reports on housing, future economic activity and business conditions in the mid-Atlantic region and improving Chinese factory output failed to lift investor sentiment.
Prices of US Treasuries and German Bund futures rose as investors tried to gauge whether Cyprus would reach a deal to enable it to avoid default and a possible financial meltdown.
The benchmark 10-year US Treasury note was up 6/32 in price to yield 1.9372 percent. The European Central Bank gave Cyprus until Monday to raise billions of euros to clinch an international bailout or face losing emergency funds for its banks and inevitable collapse.
Gold rallied to its highest in almost a month, with nervousness over Cyprus fueling sentiment for the safe-haven metal. Spot gold prices rose $6.85 to $1,612.70 an ounce.
A severe miss by Oracle Corp and a number of brokerages’ cutting of their price targets on the tech icon pulled Nasdaq-listed stocks down. Oracle fell $8.71 to $32.64.
But the broad US stock market pared losses, as underlying strength of a recent rally once again seemed to be prevailing.
“There is definitely more momentum left to the upside. In many days, we see the market start off lower but we manage to cut that by the end of the day. That’s market strength,” said Frank Gretz, chief technical analyst at Shields & Co in New York. The Dow Jones industrial average was down 35.75 points, or 0.25 percent, at 14,475.98. The Standard & Poor’s 500 Index was down 4.76 points, or 0.31 percent, at 1,553.95. The Nasdaq Composite Index was down 20.38 points, or 0.63 percent, at 3,233.81. European shares fell after Germany, the region’s leading economy, showed signs of fatigue and French businesses turned in their worst performance in four years. France, the euro zone’s second-biggest economy, likely fell into a recession.
Egypt’s bourse rose from a 14-week low yesterday as investors bet Orascom Construction Industries might soon reach a deal with tax authorities, while Gulf markets were mixed in thin trading ahead of the weekend. Egyptian newspaper Al Borsa quoted unnamed sources as saying the Ministry of Finance had reached an initial agreement with OCI under which the firm would pay 7bn Egyptian pounds ($1.03bn) of tax. There was no immediate comment from company officials. Banks helped Dubai’s index gain 0.6 percent, though buying was not heavy as investors awaited first-quarter earnings season, which will start in mid-April. The index fell 0.3 percent this week and is up 17.7 percent year-to-date. Abu Dhabi’s measure slipped 0.8 percent, trimming 2013 gains to 13.9 percent. Agencies
