Investors unsettled by price swings
Investors unsettled by price swings
By John Authers and Jennifer Hughes in New York and Steve,Johnson in London
Published: May 25 2006 03:00 | Last updated: May 25 2006 03:00. Copyright by The Financial Times
Global equity markets continued to suffer extreme volatility yesterday, with investor sentiment remaining unsettled by price swings across asset classes.
Wall Street oscillated widely throughout the day, as US economic data suggested growth was hot enough to support corporate profitability but not so strong as to warrant significant further monetary policy tightening. Its gains soon eroded, before a partial recovery in the afternoon.
The sharpest sell-offs of the day were seen in Latin America. Currencies were hard hit, and the Brazilian real fell to its lowest since August 2005 at 2.403 to the dollar. The Mexican peso slipped to 11.369 to the dollar, its weakest since January last year.
The Brazilian and Mexican stock markets are down14 and 15 per cent respectively over the past two weeks.
All the main US indices were down substantially at one point before recovering. By the close, the Dow Jones Industrial Average was up 0.2 per cent at 11,117.32. The S&P 500 was up 0.2 per cent, or 1.99 points, at 1,258.57, while the Nasdaq Composite was up 0.5 per cent.
European equity markets finished off their intra-day lows, but still in the red.
The FTSE Eurofirst 300 fell 1.4 per cent to 1,284.27 and London's FTSE 100 closed down 1.6 per cent at 5,587.1, with the pair having hit lows of 1,277.05 and 5,563.5 earlier in the session. Resource and banking stocks were once again prominent among the fallers.
In Tokyo, shares rallied sharply on bargain hunting, with the Nikkei 225 Average rising by 2 per cent. However, other Asian markets were mixed.
The mixed performance on Wall Street came as it emerged that new home sales were higher than expected in April, while sales of durable goods were weaker than forecast.
Commodities generally softened, succumbing to profit- taking after Tuesday's strong gains.
Copper was the worst performer, off 7.5 per cent at $7,825 a tonne, a day after jumping 12.7 per cent.
Treasury prices were little changed but the dollar rose 0.3 per cent to $1.2780 against the euro and 0.7 per cent to Y112.67 versus the yen. An earlier attempt to send the dollar lower met heavy resistance.
A number of emerging market currencies weakened, with the Turkish lira falling 3.5 per cent to a two-year low of TL1.545 to the dollar.
By John Authers and Jennifer Hughes in New York and Steve,Johnson in London
Published: May 25 2006 03:00 | Last updated: May 25 2006 03:00. Copyright by The Financial Times
Global equity markets continued to suffer extreme volatility yesterday, with investor sentiment remaining unsettled by price swings across asset classes.
Wall Street oscillated widely throughout the day, as US economic data suggested growth was hot enough to support corporate profitability but not so strong as to warrant significant further monetary policy tightening. Its gains soon eroded, before a partial recovery in the afternoon.
The sharpest sell-offs of the day were seen in Latin America. Currencies were hard hit, and the Brazilian real fell to its lowest since August 2005 at 2.403 to the dollar. The Mexican peso slipped to 11.369 to the dollar, its weakest since January last year.
The Brazilian and Mexican stock markets are down14 and 15 per cent respectively over the past two weeks.
All the main US indices were down substantially at one point before recovering. By the close, the Dow Jones Industrial Average was up 0.2 per cent at 11,117.32. The S&P 500 was up 0.2 per cent, or 1.99 points, at 1,258.57, while the Nasdaq Composite was up 0.5 per cent.
European equity markets finished off their intra-day lows, but still in the red.
The FTSE Eurofirst 300 fell 1.4 per cent to 1,284.27 and London's FTSE 100 closed down 1.6 per cent at 5,587.1, with the pair having hit lows of 1,277.05 and 5,563.5 earlier in the session. Resource and banking stocks were once again prominent among the fallers.
In Tokyo, shares rallied sharply on bargain hunting, with the Nikkei 225 Average rising by 2 per cent. However, other Asian markets were mixed.
The mixed performance on Wall Street came as it emerged that new home sales were higher than expected in April, while sales of durable goods were weaker than forecast.
Commodities generally softened, succumbing to profit- taking after Tuesday's strong gains.
Copper was the worst performer, off 7.5 per cent at $7,825 a tonne, a day after jumping 12.7 per cent.
Treasury prices were little changed but the dollar rose 0.3 per cent to $1.2780 against the euro and 0.7 per cent to Y112.67 versus the yen. An earlier attempt to send the dollar lower met heavy resistance.
A number of emerging market currencies weakened, with the Turkish lira falling 3.5 per cent to a two-year low of TL1.545 to the dollar.
posted by Carlos T Mock at 9:42 AM
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