April 14, 2017

IFC Markets, How is the Financial Markets on "Good Friday"? Is it the calm before the storm?

Many markets closed on Good Friday holidays.

This article is originally referred from IFC Markets Analysis.

S&P 500 index at 4-month low

US stocks closed lower on Thursday for the third straight day after earnings reports from major US banks came out and on geopolitical tensions over Syria and North Korea.

Wells Fargo stocks lost 3.3% weighing on S&P 500 on report of a drop in mortgage banking revenue. Moreover, Berkshire Hathaway reported this week that it had cut its stake in the bank. JPMorgan stocks retreated 1.2% while Citigroup lost 0.8% despite the better than expected quarterly reports. Their reports also gave evidence of a slowdown in loan growth.

Investors were disappointed by the earnings from the banks as they expected Q1 earnings to improve. Geopolitical tensions in Syria and North Korea made investors seek safe-haven assets.

More uncertainty came with the news the US dropped a bomb in Afghanistan on Thursday. US dollar index, a measure of a greenback’s value against a basket of six major currencies, advanced 0.5% after the 0.6% decline on Wednesday following the Trump’s words that the US dollar was overestimated. The Dow Jones Industrial Average slipped 0.67% to 20,453.25 and the Nasdaq Composite retreated 0.53% to 5,805.15. The S&P 500 dipped 0.68% to 2,328.95.

The benchmark has advanced 8.9% since the US presidential elections in November on Trump’s promises on tax cuts and massive infrastructure spending. The S&P 500 banks index slid on Thursday to the lowest since early December while the S&P 500 financial index fell 1.3% on its 5th straight day of losses.

The bottom performer was the energy sector which slumped 1.8%. The technologies lost 0.4% having showed the longest losing streak since May 2012. Wall Street will be closed on Good Friday holiday on Friday.

European markets are shut for a holiday on Friday

European markets are shut for the Easter holiday on Friday.

EURUSD was little changed at $1.0618 poised for its first weekly gain in three weeks, although uncertainty over the presidential elections in France still weighs on the single currency.

Asian stocks fall on geopolitical tensions and economic data

Asian stocks The shares in Japan and South Korea were losing their price with the Korean won being under pressure on Friday amid rising tensions over the North Korea.

Japanese Nikkei index lost 0.5% to 4-month low while the South Korean KOSPI dropped 0.6%.

USDJPY hit a 5-month low of 108.75 on Thursday staying close to that level.

In China, stocks are poised to end this week lower as economic recovery seems to be losing its steam, according to recent inflation and trade data, but some market participants expect the government to intervene and limit losses.

The blue-chip CSI 300 index lost 0.5% to 3,498.16 points ending the week 0.8% lower.

The Shanghai Composite index was 0.4% lower at 3,261.64 points. Most sectors in China closed in the negative territory with real estate and transport leading the decline.

The Hong Kong stock market is closed on Friday and Monday due to the public holidays.

Gold benefits from weaker dollar and political uncertainties

Gold is on track for record increase since June on Friday as rising geopolitical tensions push investors towards the safe-haven assets.

Spot gold traded at $1,286.25 an ounce little changed from Thursday.

The world’s biggest gold-backed fund SPDR Gold Shares reported its holdings increased more than 6 tonnes on Thursday, its record daily inflow in a month.

Weaker US dollar after Trump said the US currency was overestimated was also supportive factor for the bullion. Platinum advanced 0.2% to $971.15 while silver added 0.1% to $18.52 an ounce.

IFC Markets Official Website

Original Source: IFC Markets Analysis

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