Markets Turmoil

Markets Turmoil

IT Fri, Sep 23
 

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  • 09:01
    Welcome to the Irish Times live blog on the financial markets.
  • 09:03
    It's been a tough morning out there. Asian shares tumbled, with MSCI's broadest index of Asia Pacific shares outside Japan falling 3 per cent to its lowest level since May 2010. This pulled the MSCI world equity index 0.1 per cent down.
  • 09:04
    It seems investors fear the developed world is stumbling back into recession, and the pledge from the G20 to preserve financial stability left them largely unimpressed.
  • 09:05
    Things were a little better in Europe on the open, Stocks inched up from 26-month lows and the euro rose, but risk sentiment remained fragile.
  • 09:06
    Mining companies in Europe retreated.

    The Stoxx 600 slipped 0.1 to 214.76 at 8.32am in London after yesterday tumbling 4.6 per cent.
  • 09:07
    A sobering thought: More than $3.4 trillion has been erased from equity values this week.
  • 09:08
    On the Iseq, the market is currently 0.4 per cent up, at 2374.63. Bank stocks are higher, with AIB at 4.3 cent, a 7.5 per cent rise. Bank of Ireland is at 7.1 cent, up 4.4 per cent.
  • 09:10
    Origin Enterprises is also trading higher, in the wake of yesterday's results. Its stock has gained 4.2 per cent to €3.49, but volumes are low.
  • 09:24
    Elsewhere, crude oil and gold edged up, but they are still on track for their biggest weekly losses in more than a month
  • 09:26
    Hong Kong shares have finished lower - their worst week since October 2008.

    Investors sold materials stocks and cut riskier holdings.

    The Hang Seng Index closed down 1.36 per cent on the day and 9.18 per cent on the week at 17,668.83. The China Enterprises Index ended down 1.84 per cent on the day and 11.87 per cent on the week at 9,033.09. The Shanghai Composite Index was down 0.41 percent on the day and 1.98 per cent on the week at 2,433.16 - however, it was off intraday lows after gains in energy issues cut losses in materials counters.
  • 09:55
    The euro has inched up, after a sell-off that saw it fall to an eight-month low against the dollar yesterday. Butdon't relax just yet. Gains could be fleeting if investors sell into the bounce.
  • 09:55
    We welcome your comments/opinions on the topic, by the way.
  • 10:09
    The Iseq is currently up 0.6 per cent, or 14.34 points, at 2380.47.
  • 10:12
    Bank of Ireland shares are 10.3 per cent higher at 7.5 cent, AIB has gained 5 per cent during the session to 4.2 cent, and Irish Life & Permanent is at 2.8 cent, a 40 per cent increase.
  • 10:13
    Remember the day when bank shares dropping below €5 was a big deal?
  • 10:13
    On the European markets, French bank stocks were amongst the top risers this morning after having been heavily sold off due to their exposure to euro zone sovereign debt, particularly in Italy, and concerns about their liquidity and funding.
  • 10:14
    More sobering statistics: Société Génerale has lost 59.7 per cent since late July, Credit Agricole 54.7 per cent and BNP Paribas 52.6 per cent, while the STOXX Europe 600 Banks index has fallen 33.73 per cent.
  • 10:15
    Some analyst comment.

    Veronika Pechlaner, a fund manager on the Ashburton European equity fund:
    "It is only a short-term relief ... we do not know that much about how the G20 will respond to the challenge.

    "Fundamentally nothing has changed and it is too early to get aggressive at this stage. We are underweight financials and have become in more so in the last month."
  • 10:24
    In Europe, bank bond spreads have soared, with the Barclays Capital Euro Aggregate Banking Senior Index rising 17 basis points to 339 basis points more than government debt from 322 in the previous session.

    To put it in context, that's above the 325 reached in December 2008 after Lehman Brothers Holdings collapsed.
  • 10:48
    Looking to the US, there's a bit of positive news there too. Stock index futures gained, indicating the Dow Jones Industrial Average will rebound from the biggest two-day decline since 2008.
  • 10:50
    Shares in HP rose 1.4 per cent in German trading on the back of its management shuffle. Meg Whitman is replacing Leo Apotheker as CEO.

    Elsewhere, Citigroup led banks higher and futures on the Standard and Poor's 500 Index expiring in December advanced 0.6 per cent to 1,130.1 at 10.33am in London. The benchmark gauge has fallen back by 7.1 per cent this week.

    Dow futures rose 52 points, or 0.5 percent, to 10,702.
  • 10:51
    On the subject of the HP shift, analysts aren't overly confident that Whitman is the person to turn the company around.
  • 10:52
    Some of the coment is focusing on her consumer background - HP is moving more towards enterprise.
  • 10:52
    And in an interview, she said the company won't be changing its strategy, so it looks like Apotheker's plans to spin off the PC side of the business will still go ahead.
  • 11:25
    The FTSEurofirst 300 index is up 0.8 per cent, while futures for the S&P 500, the Dow Jones and the Nasdaq 100 are up 0.5 to 0.7 per cent.
  • 11:26
    The Iseq, meanwhile, has reversed its gains. It's currently down 0.087 per cent - marginal really - at 2364.08.
  • 11:27
    Bank shares are still up, although Bank of Ireland has given up some of its gains and is only 5.9 per cent higher.
  • 11:28
    Some heavyweight stocks among the fallers this morning: Elan is down 3.2 per cent to €7, Kingspan is off 0.7 per cent to €6.01. Smurfit Kappa, meanwhile, is 3.3 per cent lower at €4.35.
  • 11:28
    Some more comment on the market rally.

    Mark Priest, senior trader at ETX Capital:

    "It is a relief rally and investors are just picking up some stocks on the cheap.

    "I do not see how everything has changed overnight. Kick-starting the economy is easier said than done and it will take a lot more than what has been put on the table."
  • 11:32
    For its part, Greece is denying reports this morning that one option in the debt crisis would be an orderly default with a 50 per cent haircut for bondholders.
  • 12:03
    Gold has hit a one-month and looks like it may post its sharpest weekly drop since May. At 11.30am spot gold fell to $1,718.94 a troy ounce, having earlier hit a fresh session low at $1,715.94. That was its lowest in level in nearly a month.

    The safe-haven metal has been hit by a sell-off in commodities. Traders say investors are increasingly uncomfortable with the turmoil on the credit market and are looking to cover losses from other asset classes such as equities.

  • 12:05
    Further bad news for gold, it just hit a new session low of $1,698.54 an ounce
  • 12:27
    The uncertainty is starting to hit the euro now too. After an initial string start, it has fallen back, erasing gains versus the dollar and yen after European stocks
    declined.

    This puts the currency on track for a fourth weekly decline against the
    yen.

    It fell 0.1 per cent to $1.3453 at 12.43 pm in London, erasing an 0.8 per cent advance, and leaving its decline this week at 2.4 per cent. It was little changed at 102.63 yen, after sliding to 102.22 yesterday, the weakest level since
    2001.

  • 12:28
    Some comment.

    John Hardy, head of foreign-exchange strategy at Saxo Bank A/S in London:

    "It's all about the euro-zone debt problems right now.

    "Over the short-term, the euro will head lower."

    He's predicting the currency will weaken to $1.25 next year.
  • 12:45
    German two-year notes are on the rise, pushing the yield to a record low. Bunds have erased their decline, sending the yield down for the sixth day in a row.

    Italian bonds erased gains and were set for a weekly drop. The Austrian 10-year yield also fell.

  • 12:46
    Some comment from Orlando Green, a fixed-income strategist at Credit Agricole CIB in London:

    "There are a few pledges to support banks by the G-20 but at the moment it doesn't seem that there's enough to suggest this will be a game changer overnight.

    "There's still a lot of uncertainty in terms of global growth. The risk is on the downside [for yields]"
  • 13:08
    So much for more positive news in the US - futures are now lower. .

    S&P 500 futures have fallen 14.7 points and were below fair value - a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

    Dow Jones industrial average futures have slid 118 points, and Nasdaq 100 futures are down by 24.50 points.
  • 13:08
    And European shares are now on course for a fifth straight month of losses.
  • 13:10
    European indexes are a mass of red at the moment.

    The FTSE100 is currently down 95.07 points, or 1.89 per cent, at 4,946.54
  • 13:11
    The DAX is down to 5,004.12, a 3.1 per cent drop or 160.09 points.
  • 13:12
    The Iseq is 22.58 points lower, or 1 per cent, at 2343.55
  • 13:24
    Some analyst comment:

    Henk Potts, market strategist at Barclays Wealth:
    "It's great that they say they're going to work harder together and come up with new ideas, but I think the market's looking for tangible game-changers."

    "Until that happens, I think that investor sentiment is still going to be very poor."

    Paul Kavanagh, a partner at Killik & Co
    "It is this lack of political clarity at the moment ... the cost is being counted virtually day by day in business, and in stock markets and financial markets.

    "The (G20 came out with) a good solid statement of intent, but I think the market's looking through that, and saying 'we're not getting enough clarity here'."
  • 14:11
    The FTSE is 1.15 per cent down, a slight improvement on earlier. The index is at 4,983.71.
  • 14:14
    The CAC is down 34 points, and the DAX is off 115.
  • 14:15
    The euro is recovering its losses, but investors are wary that gains could still prove fleeting.

    The euro was last up 0.2 per cent at $1.34910 on electronic trading platform EBS with the session low posting at 1.34181 and the high at $1.35670.
  • 14:24
    The FTSE 300 is down 0.8 per cent at 868.12 points, trimming losses. The index lost as much as 2.6 per cent earlier in the session
  • 14:34
    Wall Street is set for a lower open today, as rumors of coordinated action by central banks prompted futures to cut losses.

    S&P 500 futures briefly turned positive on talk of European Central Bank
    action in the currency market. They were down 4.4 points.

    Dow Jones industrial average futures dropped 39 points, and Nasdaq 100 futures took off 8 points.
  • 14:48
    The US markets are up and running. As expected, they opened lower, with the Dow Jones industrial average was down 61.04 points, or 0.57 per cent, at 10,672.79. The Standard & Poor's 500 Index was down 5.81 points, or 0.51 per cent, at 1,123.75. The Nasdaq Composite Index was down 10.71 points, or
    0.44 per cent, at 2,444.96.
  • 15:21
    After the open, Wall Street has edged higher. This was led by a bounce in industrial and financial shares, with the Dow Jones industrial average up 1.17 points, or 0.01 per cent, to 10,735.00.

    The S&P 500 added 2.79 points, or 0.25 per cent, to 1,132.35. The
    Nasdaq Composite gained 8.91 points, or 0.36 per cent, to 2,464.58.
  • 16:16
    European shares have pared losses and turned positive this afternoon following a dismal week, helped by hopes of further measures from the European Central Bank to ease the region's debt crisis.

    French banks strongly recovering with BNP Paribas up 7.5 per cent and Societe Generale up 7.7 per cent, as traders cited market talk of help from the government with some form of capital injection to bolster the banks' balance sheets.

    The FTSEurofirst 300 index of top European shares is up 0.3 per cent at 877.71 points. The index lost as much as 2.6 per cent earlier in the session, and is set to post a weekly loss of 6.4 per cent.

    The Iseq is currently up 1.2 per cent to 2395.68. Elsewhere, the FTSE 100 is up 0.2 per cent. In Germany, the DAX is down 0.01 per cent while in France, the CAC 40 is up 0.5 per cent.
  • 17:03
    European markets are closing with most of the major bourses ending a difficult week in positive territory.

    The FTSEurofirst 300 index of top European shares has ended up 0.7 per cent. The FTSE 100, the DAX and the CAC 40 have also closed higher while in Dublin, the Iseq index has finished up 1.7 per cent to 2407.93.