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 A doctor who treated Ebola patients in West Africa became the first
person to test positive for the virus in America's largest city,
raising fresh fears about its spread.
Europe's main bourses in London, Frankfurt and Paris all opened 0.5
percent in the red and U.S. stock futures were down as investors
moved to safe-haven assets such as the yen and U.S. and European
government bonds.
"It's down to a combination of profit taking and a bit of
uncertainty about the weekend's stress test results," said David
Madden, a market analyst at IG index.
"We have already seen a spike up in Greek government bond yields
recently so the euro zone crisis has not gone away, and after this
week we are back on a 9,000 level for the DAX so people are happy to
take a bit of money off the table."
The euro also slipped on caution about the banking tests. It hit
$1.2638, having fallen for much of the week after European Central
Bank insiders told Reuters the ECB was drawing up plans for a
corporate bond purchase program.
Follow an intense, year-long review, the euro zone's 130 biggest
banks received the ECB's final verdict on their finances on
Thursday, with official results to be published on Sunday.
Juergen Fitschen, co-chief executive of Deutsche Bank and president
of the BdB association of German banks, offered a hint on Thursday,
saying the results probably gave his country's banks a clean bill of
health. Ireland's permanent tsb is so far the only failure that has
been exposed.
BEST WEEK OF YEAR
The Ebola fears saw S&P 500 mini futures fall as much as 0.7
percent, slipping from two-week highs hit on Thursday on budding
optimism from corporate earnings and the global economy.
With 177 of the S&P 500 companies having posted third-quarter
results, 69.5 percent have beaten expectations, better than the 67
percent beat rate over the past four quarters, and higher than the
20-year average of 63 percent, Thomson Reuters data showed.
MSCI's All-World index which spans bourses in 45 countries, is up
over 2.6 percent for the week, its strongest performance since July
last year. Gains in Europe were slightly less but still the best
this year.
There was also focus on Russia and Ukraine, with Russia facing a
rating review from Standard & Poor's later and elections taking
place in Ukraine on Sunday.
The rouble was at a new record low and stocks were in the red ahead
of the S&P review, which could Russia's credit rating cut to 'junk'.
Moscow will be hoping its solid finances prevent a second downgrade
from a major rating agency in as many weeks.
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"I would assume that it is too early to revisit the ratings. But
this is my personal opinion. The rating agencies work according to
their methodologies," influential former Russian finance minister
and outspoken policy critic, Alexei Kudrin, told Reuters at an event
in London this week.
Meanwhile more political stability in Ukraine could aid the European
economy, which has suffered from the fall in trade with Russia on
tit-for-tat sanctions between the West and Moscow.
"I suspect one often overlooked reason for the market's rebound
since the middle of this week was signs of easing tensions between
Russia and Ukraine," said Soichiro Monji, chief strategist at Daiwa
SB Investments.
President Petro Poroshenko's bloc holds a big lead ahead of Sunday's
poll in Ukraine, but populist Oleh Lyashko’s Radical party could
also make a strong showing.
If so, Poroshenko may have the awkward task of seeking support from
a politician who has been sharply critical of his peace plan and
contacts with Russian President Vladimir Putin.
An election that pro-Russian separatists will hold early next month
must also be navigated.
Commodities have also enjoyed a small rebound this week following a
wretched recent run on fears about slowing global growth and
oversupply in individual markets.
Brent oil was slightly softer at $86 a barrel on Friday as risk
appetite took a hit from the news of Ebola in New York but it was
set for its first gain in five weeks. Copper was heading for only
its second rise in nine weeks.
Oil markets had risen sharply on news that crude supplies to the
market from Saudi Arabia, the world's top oil exporter, fell to 9.36
million barrels per day (bpd) in September, down 328,000 bpd from
August, according to an industry source.
(Editing by Catherine Evans)
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