World Shares, Dollar Tumble as US Authorises Air Strikes in Iraq
World shares and the dollar tumbled on Friday and oil and gold jumped after US President Barack Obama authorised targeted air strikes in Iraq, raising worries of another drawn-out conflict in the region.
It came as fighting also resumed in Gaza between Palestinian militants and Israel and with NATO's calls for Russia to "step back from the brink" of war in Ukraine still ringing in ears of volatile markets.
"Earlier this week, one Iraqi in the area cried to the world, 'There is no one coming to help'," said Obama, who has been reluctant to go back into Iraq having withdrawn in 2011. "Well, today America is coming to help."
Global share markets had already been heading for a second week of straight losses but the latest developments sparked a fresh sell-off. European stocks opened down almost 1 per cent after Asian markets had seen similar falls overnight.
"Risk aversion reigns, risk aversion rules," said Kit Juckes, Head of Currency Strategy at Societe Generale in London.
"The prospect of air strikes in northern Iraq on top of the tensions in Ukraine and Gaza...across the board we have stocks weaker, bonds are stronger, the dollar is weaker and the yen is strongest of all."
Obama said in an address that he authorized targeted strikes to protect the besieged Yazidi minority and US personnel in Iraq.
UN Secretary-General Ban Ki-moon and the United Nations Security Council on Thursday called for the international community to help Iraq's government and people as the country struggles against a sweeping advance by Islamist militants.
US crude soared more than a $1 to $98.45 a barrel and Brent rose to $106.39 on the jitters of a fresh conflict in one of the world's big oil producing countries.
The dollar fell 0.4 per cent to two-week low of 101.68 against the safe-haven yen, the yields on 10-year Treasuries and German Bunds - global investors' tradition go-to assets in times of tension - dropped as low 2.375 and 1.026 per cent respectively.
Gold, another major safe-haven, hit $1,318.80 an ounce, its highest since July 18, and was last up 0.4 per cent on the day at $1,319.46.
"It seems only a short time ago that traders were talking corrections, but now it seems only a matter of time before we see technical bear markets" in some markets, IG chief market strategist Chris Weston wrote in a note to clients.
Copyright: Thomson Reuters 2014
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
-
Joining The Dots | Dark Skies, Steady Diya: Why Hope Holds This Diwali
With war, a weak rupee and foreign outflows weighing on sentiment, policymakers at the NDTV World Summit and market veterans at NDTV Profit Ignite: Diwali Edition offered the same advice: stay invested and filter out the noise.
-
The Curious Case of Equitas Small Finance Bank And A CEO Who Quit For Stock
PN Vasudevan believes persistent investor concerns over a perceived conflict of interest had become a governance overhang on Equitas Small Finance Bank's stock, even as the lender improved profitability and asset quality.
-
Talking Points This Week: AI Cash Burn, A Tiger Comeback And An India That Still Finds Its Own Path
India is not immune to higher oil or tighter global liquidity, yet its earnings base is broader, its domestic policy levers are still available.
-
Foreign Investors Own Half Of HDFC Bank and ICICI Bank. An LTCG Cut Could Matter Most Here
Foreign portfolio investors have US$115 billion parked in HDFC Bank, ICICI Bank. If the government cuts long-term capital gains tax, Jefferies says returning foreign money could land here first.
-
'Never Seen This Level Of Negativity': Sandeep Tandon Says The Next Rally May Be Closer Than You Think
Veteran investor Sandeep Tandon says foreign selling is easing, large-caps are due a comeback and mid-caps are crowded, while he turns positive on gold, power and pharma this Diwali.
-
Indians Stay With Family, Not In Hotels | The Reason Why
India still lacks enough clean, reliable and affordable hotels for budget-conscious travellers.
-
The Economic Imperative: Analysing The Material Driving Force Behind India-Canada Strategic Reset
This economic complementarity is further reinforced by deep institutional investment ties and talent mobility, which form the bedrock of the bilateral framework.
