Boston blasts: Bombings add to concerns in markets
LONDON (AP) - The sense of caution in financial markets continued on Tuesday after deadly bombings at the finish line in the Boston Marathon.
Investors have been spooked over recent trading sessions by the declines recorded in commodity prices - not just gold - as well as a run of disappointing economic data from the United States and China, the world's two-largest economies.
Monday's explosions in Boston, which killed three people, provided investors a stark reminder of the threats posed by terrorists to a fragile global economic recovery.
"The Boston bombings have only added to the sense of unease amongst investors .... equity markets have slipped in the past few days on worries that the US and Chinese economies have hit an air pocket of economic activity," said Mr Neil MacKinnon, global macro strategist at VTB Capital.
In Europe, the FTSE 100 index of leading British shares was down 0.5 per cent at 6,312 while Germany's DAX fell 0.4 per cent to 7,213. The CAC-40 in France was 0.5 per cent lower at 3,710.
Wall Street was poised to recoup some of Monday's heavy losses with both Dow futures and the broader S&P 500 futures up 0.6 per cent. How they actually open could hinge on a raft of US corporate earnings and economic data that are due before the bell. Inflation and industrial production figures are likely to garner the most attention.
A key point of interest in financial markets over the past few days has been the gold price, which has fallen dramatically amid a welter of concerns, including fears that European governments may sell the precious metal as part of their debt-fighting measures.
By mid-morning London time, it was trading 1.4 per cent higher at US$1,380 a barrel. That's only a minor bounce back from Monday, when gold logged its biggest one-day decline in more than 30 years, tumbling US$140.30, or 9 per cent, to US$1,361, just above its earlier low of US$1,357.10.
"At some point gold could well be subjected to participants looking to own gold at cheaper levels than over the last few months," said Mr David White, a trader at Spreadex. "But, critically, calling the bottom on any such process is hazardous at best."
The gold price isn't the only commodity that's taken a battering over recent days. Industrial metals have also faltered amid concerns over the global economic recovery, as has the price of oil. The benchmark New York crude rate was down again on Tuesday, trading 57 cents lower at US$88.14 a barrel.
Currency markets also remained volatile, particularly the yen, which had recovered some lost ground on Monday amid rising global growth concerns.
Over the previous week or so, the yen had taken a battering, to the potential benefit of Japan's exporting powerhouses, due to the Bank of Japan's aggressive new monetary policy to get the country's moribund economy going again.
The dollar was 0.9 per cent higher at 97.80 yen on Tuesday. The euro was up 0.2 per cent against the dollar, at US$1.3076.
Earlier in Asia, stocks were mixed after being hit on Monday by lower than anticipated Chinese economic growth figures. While Japan's Nikkei fell 0.4 per cent to close at 13,221.44 and Hong Kong's Hang Seng lost 0.5 per cent to 21,672.03, benchmarks in South Korea and mainland China rose.