Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


While you were sleeping: Political risks hit sentiment

While you were sleeping: Political risks hit sentiment

Feb 5 (BusinessDesk) – Stocks on both sides of the Atlantic dropped as concern about Europe's political and financial instability returned, and Wall Street's five-year highs left investors with vertigo in the absence of signs to justify current valuations.

The latest American economic report also disappointed.

Orders to US factories advanced 1.8 percent in December after a revised 0.3 percent slide the prior month, according to Commerce Department data. The gain though fell short of estimates of analysts polled by both Bloomberg News and Reuters, which had predicted increases of 2.3 percent and 2.2 percent respectively.

That report put a damper on enthusiasm stemming from Friday in the US when a slew of data seemed to point to a strengthening recovery.

In afternoon trading in New York, the Dow Jones Industrial Average dropped 0.90 percent, while the Standard & Poor's 500 Index shed 0.91 percent, and the Nasdaq Composite Index declined 1.26 percent.

Shares of Wal-Mart Stores slid, last 1.6 percent lower at US$69.37 after earlier falling as low US$69.13, after JPMorgan Chase reduced its rating on the stock.

Shares of Oracle dropped, last 2.4 percent lower, after the company agreed to buy Acme Packet for about US$2.1 billion. Acme Packet shares soared, climbing 22 percent.

Shares of Herbalife also sank, last down 3.7 percent, after The New York Post reported the company is facing an investigation by the Federal Trade Commission.

In Europe, the Stoxx 600 Index ended the day with a 1.5 percent slide from the previous close. Benchmark stock indexes also dropped in London, Frankfurt and Paris. German stocks were hurt after the nation's second biggest bank, Commerzbank, posted a wider than expected quarterly loss and warned of more trouble ahead.

Spain’s IBEX 35 plunged 3.8 percent amid calls for Prime Minister Mariano Rajoy to resign amid fury over reports of corruption involving the ruling party. Rajoy has denied allegations.

Spanish bonds dropped, sending the nation's 10-year yield up 23 basis points to 5.44 percent.

"The prospect of Rajoy's resignation has roiled the markets," Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York, told Reuters.

"Any fresh political instability in (the) euro zone's most important periphery economy could undermine the sense of investor confidence and send Spanish yields higher, making it much more difficult for the government to implement its austerity measures."

Italy, meanwhile, is plagued by concern about the increasing popularity of Silvio Berlusconi as the nation heads to the polls in three weeks. A potential election victory for the former premier could curb efforts to reform the country's finances.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Hager Raid: Westpac Wrong To Release Bank Records To Police

The Privacy Commissioner has censured Westpac Banking Corp for releasing without a court order more than 10 months of bank records belonging to the political activist and journalist Nicky Hager during a police investigation into leaked information published in Hager's 2014 pre-election book, 'Dirty Politics'. More>>

ALSO:

EARLIER:

Crown Accounts: Government Ekes Out Six-Month Surplus Of $9M

The New Zealand government eked out a tiny surplus in the first six months of the fiscal year as growth in domestic consumption lifted the goods and services tax take, while uncertainties over the Kaikoura earthquake costs meant expenses were less than expected. More>>

ALSO:

Almost 400 Jobs: Shock At Cadbury's Dunedin Factory Closure

Workers at Cadbury in Dunedin are reeling after learning this morning that the iconic Cadbury factory is to close, with the loss of almost 400 jobs... “The company had reported it was doing well and this has come out of the blue,” says Chas. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news