News / Economy

Stocks Sag on Ukraine Worries; Gold, Yen Boosted by Safety Bids

A man walks past an electronic board displaying various countries' stock price indices outside a brokerage in Tokyo, Japan, Mar. 14, 2014.
A man walks past an electronic board displaying various countries' stock price indices outside a brokerage in Tokyo, Japan, Mar. 14, 2014.
Reuters
— Growing tension between the West and Russia ahead of Ukraine's weekend referendum in Crimea pushed down stocks on major world markets on Friday and drove up buying of safe-haven gold and the yen.

Financial markets watched nervously as the West increasingly talked about sanctions and Russia hit back with promises of retaliatory measures and displays of military prowess. The vote being held on Sunday by pro-Moscow authorities is to determine if Crimea will join Russia.

Jitters also remained over the degree to which China's economy is slowing after unsettling data this week.

The MSCI global market index was down 0.4 percent and was on track for a loss of about 2 percent for the week, while gold prices reached their highest level in six months. Spot gold rose as much as 1.4 percent to its highest level since Sept. 9, and was last up 1 percent at $1,384.20 an ounce.

Moscow's MICEX index fell more than 5 percent before clawing back some of its losses to trade down 0.9 percent. The rouble was steady but close to recent record lows.

Russia's central bank on Friday kept lending rates on hold after raising them two weeks ago and said it would fight for financial stability after the standoff with the West over Crimea. The Russian central bank said there would be no easing of rates in the months ahead, suggesting it expects more tough times ahead for the rouble and for stocks, which have lost about a quarter of their value since mid-February.

Part of the concern over the Crimea referendum on Sunday is that it could encourage other pro-Moscow parts of the country to follow suit and potentially embolden Russia in the region.

“There is a lot of anticipation about that Crimea vote coming up, so that is out there, a little bit of uncertainty,” said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.

U.S. Secretary of State John Kerry met Russian counterpart Sergei Lavrov in London in last-ditch diplomatic efforts to defuse tensions, but Moscow and the West appeared increasingly far apart.

Russia shipped more troops into Crimea on Friday and repeated its threat to invade other parts of Ukraine. A German newspaper reported that the chief executive officers of Russia's two largest firms are on a list of those who may be hit next week with European and U.S. sanctions over the Crimea crisis.

U.S. stocks edged up, a day after the S&P 500 posted its biggest loss since early February. The Dow Jones industrial average rose 17.05 points, or 0.11 percent, to 16,125.94, the S&P 500 gained 1.57 points, or 0.09 percent, to 1,847.91, and the Nasdaq Composite added 1.988 points, or 0.05 percent, to 4,262.408.

The FTSEurofirst 300 index of top European shares was down 0.6 percent. Shares of companies most exposed to Russia were under pressure, including Danish brewer Carlsberg , down 0.8 percent.

Dollar losing ground versus yen

In the foreign exchange market, the latest developments in the Ukraine crisis sent the safe-haven yen soaring against both the dollar and the euro. The yen was headed for its biggest weekly gain in more than a month against the dollar.

The euro fell as much as 0.5 percent against the yen in early U.S. trading before trimming losses to trade 0.25 percent lower on the day at 140.88 yen.

Against the yen, the dollar fell 0.5 percent, to 101.36 yen . On the week, the dollar has lost 1.7 percent, on track for its biggest losses since late January.

“I don't think anyone wants to hold any large risky positions going into the weekend,” said Shaun Osborne, chief foreign exchange strategist at TD Securities in Toronto.

U.S. Treasuries prices edged higher on the Ukraine worries and after data showed a dip in U.S. consumer sentiment. The 10-year U.S. Treasury note was last up 5/32 in price to yield 2.63 percent, compared with a yield late Thursday of 2.653 percent.

U.S. economic data showed consumer sentiment weakened in early March as an unusually harsh winter appeared to dim views on the economy's prospects.

Foreign central banks' overall holdings of U.S. marketable securities at the Federal Reserve plunged in the latest week,  data from the U.S. central bank showed.

The Fed said its holdings of U.S. securities kept for overseas central banks sank by $106.142 billion in the week ended March 12, to stand at $3.206 trillion. The tumble brings the total on deposit with the Fed to the lowest level since December 2012.

In the oil market, Brent crude was up 87 cents at $108.26 a barrel, while U.S. crude futures rose 67 cents to settle at $98.87.

With Russian assets continuing to slump, investors were taking the view that while the situation did not look good, Vladimir Putin and the Kremlin were unlikely to flinch.

“Obviously Russia will not back down so it all points to an escalation,” Viktor Szabo, a fund manager at Aberdeen Asset Management who holds Ukraine and Russian bonds, said.

Copper, whose demand is seen falling as Chinese economic growth slows, edged higher but was on track for a 5 percent weekly loss.

Benchmark three-month copper on the London Metal Exchange traded up 0.84 percent at $6,469 a ton in official midday rings, after sinking to a 44-month low of $6,376.25 on Wednesday.

“We have very bad headline risks now, including Ukraine, Russia, Venezuela, growth fears in China and elections in many large emerging economies,” said Jorge Mariscal, chief investment officer of emerging markets at UBS Wealth Management.

You May Like

At Khmer Rouge Court, Long-Awaited Verdict Approaches

First phase of trial, which is coming to an end, has focused on forced exodus of Phnom Penh in 1975 - and now many are hopeful justice will be served More

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities More

Video Information War Rages Alongside Real One in Ukraine

Downing of Malaysian airliner, allegations of cross-border shelling move information war in war-torn country to a new level More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Information War Rages Alongside Real One in Ukrainei
X
Al Pessin
July 31, 2014 8:13 PM
The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.