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

Mood Tense Ahead of Scotland Independence Vote

As race to persuade undecided voters continues, No voters say they believe life in Scotland will slowly improve and do not want to take a risk by endorsing independence More

South Africa’s 'Open Mosque' Admits Everyone, Including Critics

Open Mosque founder plans to welcome gay worshipers and allow women to lead prayers More

Ukrainian Activist in Despair About Future of Her Country

IrIna Dovgan, accused of being a spy and tortured by pro-Russian separatists, is appealing to UN Human Rights Council to support her country More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
NASA Picks Boeing, SpaceX to Carry Astronauts Into Spacei
X
September 17, 2014 4:20 AM
The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.
Video

Video China Muslims Work to Change Perceptions After Knife Attacks

China says its has sentenced three men to death and one woman to life in prison for a deadly knife attack in March that left more than 30 dead and 140 injured. Beijing says Muslim militants from China's restive western region of Xinjiang carried out the attacks. Now, more than six months after the incident, residents in the city are still coping with the aftermath. VOA's Bill Ide has more from Kunming.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Washington DC Mural Artists Help Beautify City

Like many cities, Washington has a graffiti problem. Buildings and homes, especially in low-income neighborhoods, are often targets of illegal artwork. But as we hear from VOA’s Julie Taboh, officials in the nation's capital have come up with an innovative program that uses the talents of local artists to beautify the city.
Video

Video US Muslim Leaders Condemn Islamic State

Leaders of America's Muslim community are condemning the violent extremism of the Islamic State group in Iraq and Syria. The U.S. Muslim leaders say militants are exploiting their faith in a failed effort to justify violent extremism. VOA correspondent Meredith Buel reports.
Video

Video Bedouin Woman Runs Successful Business in Palestinian City

A Bedouin woman is breaking social taboos by running a successful vacation resort in the Palestinian town of Jericho. Bedouins are a sub-group of Arabs known for their semi-nomadic lifestyle. Zlatica Hoke says the resort in the West Bank's Jordan Valley is a model of success for women in the region.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid

World Currencies

EUR
USD
0.7722
JPY
USD
107.08
GBP
USD
0.6171
CAD
USD
1.1041
INR
USD
61.075

Rates may not be current.