|
 European stocks flirted with their fourth daily decline in a row and
benchmark U.S. Treasury yields rose for the fifth straight session,
something not seen since early June.
Shares in the euro zone's biggest bank Santander fell as much as 2
percent, lagging the euro zone and pan-European financials indices ,
after the sudden death of its 79-year old chairman Emilio Botin.
Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan
fell 1.3 percent, its largest fall in nearly six months.
At mid-session the FTSEurofirst index of leading European shares was
down 0.1 percent at 1384 points. Germany's DAX was down 0.1 percent,
France's CAC 40 was flat and Britain's FTSE 100 up 0.1 percent.
Stock markets' struggles on Wednesday followed broad weakness on
Wall Street the previous day after initial excitement over Apple
Inc's new products evaporated, and as bond yields continued their
march higher.
The 10-year U.S. yield scaled 2.5 percent, lifting European yields,
as investors continued to digest a study earlier this week by the
San Francisco Fed that showed investors expect slower rate hikes
than policymakers themselves expect.
Germany's 10-year yield rose back above 1 percent to 1.02 percent,
its highest in a month, and Spain's rose 10 basis points to 2.29
percent.
"The study by the San Francisco Fed unnerved investors that markets
are too complacent about the pace of Fed rate hikes," said Nick
Stamenkovic, bond strategist at RIA Capital Markets.
"It is only a matter of time before the Fed moves for tighter
policy."
SCOTTISH POLL JITTERS
The shift towards pricing in an earlier U.S. rate hike helped the
dollar hold onto its recent gains.
The dollar hit a six-year high against the yen of 106.79 yen and the
dollar index, a basket of its value against six major currencies,
hovered near Tuesday's 14-month high.
The euro recovered from Tuesday's 14-month low of $1.2860 back to
$1.2943, and sterling hit a 10-month low of $1.6052 before
recovering almost a cent.
But with latest official polls suggesting the outcome of the
Scottish independence referendum is now too close to call, the "risk
premium" surrounding the possibility the 300 year-old United Kingdom
could cease to exist next week continues to hang over British
financial assets.
[to top of second column] |
The brief sterling dip followed an unverified web poll by an
independent blogger that showed the pro-independence camp leading
with 53.9 percent.http://barker.co.uk/scotlandpoll.
Prime Minister David Cameron and the leaders of the other two main
political parties traveled to Scotland on Wednesday to try and save
the union.
"What you've got is the spectacle of the three main political
leaders rushing up to Scotland like a spurned boyfriend trying to
placate an aggrieved girlfriend with offers to stay, plucking
promises out of thin air," said Michael Hewson, chief strategist at
CMC Markets.
On Tuesday, Bank of England governor Mark Carney said Scotland could
not be fully independent and have a currency union with the rest of
the UK, warning that currency union is "incompatible with
sovereignty".
Gold recovered from Tuesday's three-month low of $1,247.15 per ounce
to stand at $1,254.10.
For a wrap-up of the news and events driving markets on Wednesday,
click on Reuters TV link: http://reut.rs/1p69LWp
(Reporting by Jamie McGeever, additional reporting by Marius Zaharia,
editing by John Stonestreet; To read Reuters Global Investing Blog
click on http://blogs.reuters.com/globalinvesting; for the
MacroScope Blog click on http://blogs.reuters.com/macroscope; for
Hedge Fund Blog Hub click on http://blogs.reuters.com/hedgehub)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright
2014 Reuters. All rights reserved. This material may not be
published, broadcast, rewritten or redistributed.
 |
