Ebola Triggers U.S. Stock Price Fall, As European Equities Hit By Factory Data

BY< SAYO AKINTOLA Stock markets worldwide closed out the first day of the fourth quarter on a weak note on Wednesday, weighed by disappointing manufacturing data in Europe and the first confirmed case of Ebola in the United States. Weak economic data, the conflicts in Iraq and Russia, and growing unrest in Hong Kong have contributed to expectations that markets will become increasingly rocky in coming months. “If you spent the entire summer wishing there was more volatility in the market, your dream has come true,” said Art Hogan, chief market strategist at Wunderlich Securities in New York. “You have multiple global macro concerns, a new Ebola scare, beginning of a new quarter, and on the very short horizon, earnings season starting.” Bond markets drew safe-haven bidding, with the benchmark U.S. 10-year Treasury’s US10YT=RR yield falling to 2.391 percent, the lowest level in nearly a month. The yield on Germany’s 10-year Bund fell as low as 0.897 percent, not far from record lows reached about a month ago. [US/] MSCI’s global index of equities .MIWD00000PUS was down 1 percent after a 3 percent drop in September. The pan-European FTSEurofirst 300 .FTEU3 equity index closed down 0.9 percent after final September purchasing managers numbers from France, Germanyand the euro zone as a whole highlighted the instability of the European recovery. U.S. purchasing managers’ data was also weaker than expected, though it still showed growth in factory activity. Wall Street was sharply lower, continuing its recent weakness. The Russell 2000 index .RUT index of smallcap stocks ended in correction territory, now at more than 10 percent below the record closing high set in March. Airline and hotel stocks dropped in reaction to the first confirmed U.S. case of Ebola. The NYSE Arca Airline index .XAL suffered its biggest percentage decline since January. The Dow Jones transportation average .DJT dropped 2.5 percent, its biggest daily percentage drop since February. But shares of drugmakers with treatments for Ebola rallied sharply on news of the first U.S. case of the disease. The Dow Jones industrial average .DJI fell 238.19 points, or 1.4 percent, to 16,804.71, the S&P 500 .SPX lost 26.13 points, or 1.32 percent, to 1,946.16 and the Nasdaq Composite.IXIC dropped 71.31 points, or 1.59 percent, to 4,422.09. The dollar .DXY was little changed near a four-year high, helping some commodity prices bounce from Tuesday’s sell-off. Spot gold XAU= was up 0.4 percent at $1,214.05 an ounce, having earlier fallen to within 10 cents of Tuesday’s nine-month low of $1,204.40. The euro zone data, along with a report on slowing euro zone inflation on Tuesday, underscored the contrasting monetary policy outlooks of the U.S. Federal Reserve and the European Central Bank. The ECB meets on Thursday, and its accommodative stance has had investors favoring the dollar over the euro. The euro EUR=, down 0.1 percent at $1.2615, continued to inch lower, but pare declines to climb back above the $1.26 mark, a level it had held for two years until Tuesday. Oil prices were initially helped by Chinese PMI data before fading late in the session. China’s PMI stayed at 51.1, modestly above the 50 level that separates growth from contraction and just above the 51 forecast. Brent crude oil LCOc1 settled at $94.16, down 0.5 percent on the day. U.S. crude CLc1 settled at $90.73, also off 0.5 percent. On the other hand, Market maintained positive trend on the Nigerian Stock Exchange before the Independence anniversay holiday on Wednesday as index appreciated 0.25% Trading activities on the Nigerian stock exchange increased significantly as investors bought 1.08 billion shares worth N8.08 billion, in 4,894.00 deals, compared to 245.92 million shares worth N2.77 billion, in 4,567.00 deals exchanged on Monday. Zenith Bank Plc, Chams City Plc and Transcorp Plc were the most actively traded stocks on the exchange today in terms of volume, while Zenith Bank Plc and Guaranty Trust Bank Plc, topped in terms of value. The Nigerian Stock Exchanges-All Share Index appreciated by 0.25% (+104.72) to close at 41,210.10 from 41,105.38 attained on Monday. Market capitalisation also increased to N13.61 trillion from N13.57 trillion the previous trading day. The BGL 50 Index also followed suit with a 0.38% gain to close at 178.05 from 176.84, while the market cap stood at N12.84 trillion from N12.75 trillion recorded on Monday. A total number of 30 stocks gained on the bourse today while 24 stocks declined leaving 58 stocks unchanged. UPDC Plc emerged the toast of investors as it appreciated by 9.08% to close at N15.85 kobo, followed by Nascon Plc. with a 7.78% gain to close at N9.70. Others on the gainers chart include Guinness Nigeria Plc, P Z Cussons Plc and Stanbic IBTC Holdings Plc. On the flip side Seplat Petroleum Dev. Co. Ltd topped the losers chart with 3.30% decline to close at N645.00, followed by Honeywell Flour Mill Plc which declined by 2.25% to close at N3.91 kobo. Others on the losers table include; Glaxo Smithkline Consumer Nig. Plc, FBNH Plc and Skye Bank Plc.

Author: News Editor

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