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

 


While you were sleeping: Portuguese banking worries

While you were sleeping: Portuguese banking worries

July 11 (BusinessDesk) - Equities on both sides of the Atlantic declined as concern about Portugal’s largest publicly traded bank renewed worry about the euro-zone’s financial stability.

Shares of Portugal’s Banco Espirito Santo plummeted 17 percent amid concern about missed debt payments by its parent Espírito Santo International before trading in the stock was halted. Bank shares in Italy and Spain also declined.

“People will shoot first and ask questions later when news like this hits,” Lawrence Creatura, a fund manager at Federated Investors in Rochester, New York, told Bloomberg News. “It’s a classic flight to safety across the equity, commodities and bond markets.”

In Europe, the Stoxx 600 Index ended the session with a 1.1 percent drop from the previous close. The UK’s FTSE 100 fell 0.7 percent, France’s CAC 40 shed 1.3 percent, while Germany’s DAX slumped 1.5 percent.

Benchmark stock indexes also declined in Portugal, Spain, Italy and Greece.

“The BES situation is a tangled story of cross holdings and unexplained debts which has highlighted the risks that still exist in some European banks," Lorne Baring, managing director of B Capital Wealth Management, told Reuters.

"There is some contagion effect in markets today,” Barin added: “However, it may be an over-reaction to the BES news ... Some investors may be questioning the strength of the peripheral Europe recovery after a strong market performance.”

In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.27 percent, the Standard & Poor’s 500 index slid 0.29 percent, while the Nasdaq Composite Index gave up 0.26 percent.

Declines in shares of Home Depot and Nike, down 2 percent and 1.3 percent respectively, led the Dow lower.

US Treasuries rose as some investors opted for the perceived safety of fixed-income securities, pushing the yield on the benchmark 10-year bond two basis points lower to 2.53 percent.

German bunds also advanced, sending Germany’s 10-year yield three basis points lower to 1.20 percent.

“As I look at some of the policy prescriptions that the Federal Reserve relies on, looking at formulas that help guide you on when it's time to change, many of those are already pointing to lifting off of zero as early as even this year or next year," Kansas City Federal Reserve President Esther George said, according to Dow Jones.

Gold increased in appeal as well. Gold futures for August delivery rose 1.1 percent to settle at US$1,339.20 an ounce on the Comex.

"There seems to be a lot of angst in the market short-term but given the fact we had such a run the past couple of weeks, it seems to be more psychological than real," Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama, told Reuters.

The Chicago Board Options Exchange Volatility Index, also referred to as the investors’ fear gauge, climbed 5 percent to 12.23.

Meanwhile, the latest US economic data provided more better-than-expected results on the nation’s labour market, hot on the heels of last week’s government jobs report for June. Initial claims for state unemployment benefits fell 11,000 to a seasonally adjusted 304,000 for the week ended July 5, according to the Labor Department.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Quotas: MPI Swoop On Suspected Fraudulent Fishing Activity

Ministry for Primary Industries (MPI) compliance officers swooped on a Hawkes Bay fishing enterprise today to secure evidence in an investigation into suspected fraudulent activity... “The investigation involves activity throughout the commercial supply chain – catching, landing, processing and exporting.” More>>

ALSO:

Scoop Business: Fonterra Slashes 2015 Milk Payout, Earnings Tumble 76%

Fonterra Cooperative Group cut its forecast 2015 milk price payout by about 12 percent, citing weaker global dairy prices and said there is a risk of further declines given strong global milk production. More>>

ALSO:

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news