Close  

World stocks slide as US authorizes air strike

MANILA, Philippines — The authorization of US President Barack Obama for an air strike on Iraq and a rescue plan for Iraqi civilians trapped in a mountain Friday have caused world stocks to slide and gold prices to increase.

“Futures on the Standard & Poor’s 500 Index dropped 0.5 percent by 8:16 a.m. in London, while the Stoxx Europe 600 Index plunged 1 percent and Asian stocks fell. Bunds rallied and 10-year US Treasury yields fell to as low as 2.35 percent, the least since June 2013,” Bloomberg news reported.

ADVERTISEMENT

The report also said that gold bullion for immediate delivery rose as much as 0.8 percent to $1,322.76 an ounce, the highest in a month.

Iraq responded by increasing oil prices.

FEATURED STORIES

In Asia, Tokyo stocks dropped to a two-month low, falling 2.98 percent, or 454.00 points, to close at 14,778.37. Sydney was down 1.34 percent, or 73.7 points, to close at 5,435.3, while Seoul lost 1.14 percent, or 23.41 points, to end at 2,031.10.

Hong Kong fluctuated through afternoon trade before closing down 0.23 percent, or 56.15 points, to 24,331.41.

However, stocks in mainland China bucked the downward regional trend after the world’s second-largest economy saw export growth accelerate.

Shanghai closed up 0.31 percent, or 6.76 points, at 2,194.43, and Shenzhen gained 0.68 percent, or 7.91 points, to 1,174.41.

“The market is very thin and highly reactive to overseas inputs,” Yutaka Miura, senior technical analyst at Mizuho Securities, told Dow Jones Newswires.

China’s monthly trade surplus jumped to a record $47.3 billion in July. Exports increased 14.5 percent year-on-year to $212.9 billion, the General Administration of Customs announced, while imports decreased 1.6 percent to $165.6 billion.

In Malaysia, the majority shareholder of ailing Malaysia Airlines said the firm is to be de-listed and taken private ahead of a major restructure following the twin disasters of flights MH370 and MH17.

ADVERTISEMENT

INQUIRER.net STOCK PHOTO

Worsening conditions

State investment fund Khazanah Nasional, which owns 70 percent of the carrier, said it would purchase all minority shares in the firm.

In the US, The Dow Jones Industrial Average dropped 75.07 points (0.46 percent) to 16,368.27.

The broad-based S&P 500 fell 10.67 (0.56 percent) to 1,909.57, while the tech-rich Nasdaq Composite Index lost 20.08 (0.46 percent) at 4,334.97.

Brent Schutte, market strategist at BMO Global Asset Management, said Thursday’s losses on Wall Street were “completely” due to a sharp worsening of conditions in Iraq.

In Tokyo, the Nikkei’s tumble below the psychologically important 15,000 level came as the yen — shot up in forex markets.

The dollar dropped to as low as 101.58 yen before recovering to 101.81 yen, but it was still well down from 102.09 yen in New York late Thursday.

The euro was also lower against the Japanese currency at 136.04 yen from 136.42 yen, while it bought $1.3360 against $1.3363.

Investors tend to buy the yen in times of uncertainty and turmoil because it is regarded as a currency safe haven.

In oil trade, the US benchmark West Texas Intermediate for September delivery rose 71 cents to $98.05 while Brent for September gained 96 cents to $106.40 in afternoon trade.

Gold fetched $1,316.64 an ounce by 0900 GMT compared with $1,305.20 late Thursday.

In other markets:

— Manila fell 1.08 percent, or 74.87 points, to 6,880.34.

Philippine Long Distance Telephone dropped 0.46 percent to P3,000.00, while Ayala Land retreated 2.23 percent to P30.70.

— Taipei fell 0.5 percent, or 45.48 points, to 9,085.96.

TSMC fell 0.82 percent to Tw$120.5, while Acer rose 1.66 percent to Tw$24.45.

— Wellington fell 0.83 percent, or 42.31 points, to 5,055.20.

Telecom Corp was off 1.74 percent at NZ$2.82 and Fletcher Building slipped 2.12 percent to NZ$8.76.

Obama said that his authorization came as a precautionary action, should terrorist group ISIL cause harm to any American military personnel, diplomat, or civilian.

“To stop the advance on Irbil, I’ve directed our military to take targeted strikes against ISIL terrorist convoys should they move toward the city,” Obama said.

“We intend to stay vigilant, and take action if these terrorist forces threaten our personnel or facilities anywhere in Iraq, including our consulate in Irbil and our embassy in Baghdad,” Obama said.

RELATED STORIES

Obama authorizes air strikes to prevent Iraq ‘genocide’

US weighs airstrikes and humanitarian aid in Iraq
 

Read Next
LATEST STORIES
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Barack Obama, Business, Civil unrest, Iraq air strike, unrest
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2019 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.