Asia Pacific stock markets have endured another day of losses after North Korea said it had conducted a nuclear test, stoking geopolitical concerns in the region.
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Oil-linked currencies like the Canadian dollar sank deeper on shaky crude prices.
The prospect of weakening demand from China has clobbered the price of oil, industrial metals, energy and resources.
Adding to the market’s frayed nerves, North Korea said on Wednesday that it successfully staged its first test of a more powerful form of nuclear weapon. Experts in South Korea and the US doubted that the country had made that breakthrough, but the announcement still caused alarm. The Nasdaq was down 157 points, or 3 percent.
The picture is similarly gloomy on Wall Street, with the S&P 500 losing 2.4 percent on Thursday, with 40 percent of the stocks in the benchmark trading 20 percent or more off of their highs, the definition of a bear market.
The price of copper fell 6.6 cents, or 3.2 percent, to $2.022 a pound. The NASDAQ composite index fell 146 points. Britain’s FTSE 100 fell 1 percent. Hong Kong’s Hang Seng shed 1 percent. Chinese stocks were volatile Friday and other Asian markets rebounded after a plunge in Chinese prices rattled global markets.
Also among the top gainers was Royal Mail, rising 1.6 percent after Barclays upgraded its price target on the stock. The Shanghai Composite index tumbled 7.3 percent before trading was suspended.
It was the second time this week that trading was halted – the first came after weak manufacturing data – and China was widely criticized for the move, which was seen as unable to stop mounting losses. Investors are also unnerved that Beijing has allowed the yuan currency to weaken, a possible sign the economy is in worse shape than thought.
In currency markets, the dollar fell to $1.0883 from $1.0917 in the previous trading session. (CVX) dropped 2.1%.
BONDS: The markets have endured a rough few days to start 2016.
“European government bond markets are enjoying a (balanced) environment, with sliding inflation expectations augmenting the lingering emerging market concerns”, Commerzbank rate strategist Michael Leister said.
But that may mean even more volatility in a year that has already had a lot. “They want the security of knowing that their money is safe”. Fears range from China exporting recession to the world to China fomenting another crisis in global markets.
Data showed that private employers added 257,000 jobs, far ahead of the 192,000 increase expected by economists polled by Reuters. WTI fell 1 percent to $32.95 a barrel after gaining more than 3 percent earlier. China is a key market for German’s BMW and Mercedes Benz, for example, and Germany’s DAX index is down 7.1 percent this week.
GAP WOES: Retailer Gap said its sales slumped in December. Energy companies fell with the price of oil and drug stocks also slipped. The stock dropped $5.98, or 10.5 percent, to $50.76.
CHIPOTLE HIT AGAIN: Chipotle Mexican Grill said it received a federal grand jury subpoena as the government looks into norovirus outbreak at a California restaurant this summer. Its stock has plunged 85 percent over the last two years. Macy’s lost 63 cents, or 1.7 percent, to $36.26. Chipotle has fallen 40 percent since the outbreaks began in October. The euro weakened to $1.0730 from $1.0744. The dollar fell to 118.56 yen from 118.97 yen late Tuesday.
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The price of gold and silver both rose more than 1 percent, with gold at $1,105.60 an ounce and silver at $14.20 an ounce. It ended the week off 6.7%, for its largest one-week percentage decline since 2011.
