Equities decline globally; oil, metals prices rise

Elaine Frei | March 28, 2007 | 0 Comments

Global equities markets were lower on Wednesday. In Asia and the Pacific, the Sydney Ordinaries dropped 0.66 percent to 5,913.3, while the Hang Seng index in Hong Kong fell 0.78 percent to 19,553.87. Elsewhere in the region, the declines were even larger. The Straits Timex index in Singapore was 1.07 percent lower to 3,201.75 and in India the Sensex fell 1.83 percent to 12,884.34. The declines weren’t quite as steep in Tokyo. The Nikkei as at 17,254.73 at the close, a drop of 0.6 percent, while the Topix index fell 0.7 percent to 1,711.06, mainly on new worries about the US economy and new strength in the yen.

In Europe, the FTSE Eurofirst 300 dropped 0.66 percent to 1,499.13. In Frankfurt, the Xetra Dax fell 0.6 percent to 6,816,89, while the CAC-40 was 0.62 percent lower, to 5,552.69. London saw declines as well. The FTSE 100 was 0.4 percent lower to 6,267.2 and the FTSE 250 dropped 0.5 percent to 11,582.7 on the session.

Wall Street was lower at noon after new data showed that durable goods orders were not up as much as had been hoped in February. It didn’t help that Federal Reserve chairman Ben Bernanke said in testimony before the congressional Joint Economic Committee that recent inflation readings are still “uncomfortably high” even though core inflation grew only “modestly” in the last half of 2006. The Dow Jones Industrial Average was 0.44 percent lower to 12,342.58, and was down by as much as 140 points at times during the morning. The Nasdaq Composite fell 0.37 percent to 2,428.33, while the S&P 500 dropped 0.31 percent to 1,424.13.

Rumors of an attack on a US naval vessel by Iran, quickly denied by the US government, sent crude oil prices up by $1.50 for both Brent crude and West Texas Intermediate crude, with prices also supported by an unexpected decrease in the amount of crude oil in storage in the US. Metals prices were also higher on the session.

In currencies markets, the Japanese yen was 1 percent higher against the US dollar, the euro, and sterling, while it rose even more against the Australian and New Zealand dollars. The US dollar was otherwise little changed, as was sterling.