NEW YORK: Japan's massive earthquake and deadly tsunami pounded commodity and equity markets worldwide and lifted the yen on Friday on expectations Tokyo will repatriate funds to pay for repairs.
Oil prices slid more than $3 a barrel, with US crude falling below $100, while MSCI's all-country world index of global stocks fell to a five-week low after the biggest earthquake on record hit northeast Japan.
The Nikkei 225 index in Japan slid 1.7 percent.
The 8.9 magnitude earthquake triggered a 10-meter tsunami that killed hundreds of people and swept away everything in its path, including houses, ships and cars.
Metals prices skidded on worries about the quake's impact on the world's third-largest consumer of commodities, as well as on Chinese inflation data, which fueled concerns over demand from the world's top consumer of metals.
Chinese February inflation topped expectations at 4.9 percent and looked set to climb further in coming months, adding to pressure for another dose of monetary tightening.
North Sea Brent fell 1.5 percent to $113.77, while US light sweet crude was off 2.2 percent to $100.50.
"The earthquake is clearly risk-negative, and you have seen continuation of selling that has been going on all week. But there are plenty of other things to make the world unhappy," RBS global head of commodity and strategy Nick Moore said.
European shares dropped to three-month lows, reflecting an increase in risk aversion, but US stocks managed limited losses as US Commerce Department data pointed to strong consumer spending and accelerated growth in the first quarter.
The pan-European FTSEurofirst 300 index of top shares was down 0.6 percent.
US retail sales posted their largest gain in four months in February as shoppers stepped up purchases of autos, clothes and other goods even as they spent more for gasoline.
The Dow Jones industrial average was down 32.21 points, or 0.27 percent, at 11,952.40. The Standard & Poor's 500 Index lost 2.07 points, or 0.16 percent, to 1,293.04. The Nasdaq Composite Index was down 7.09 points, or 0.26 percent, at 2,693.93.
The yen gained against the dollar and the euro, buoyed by expectations repatriated funds will flow in to pay for repairing quake- and tsunami-caused damages.
The yen recovered after an initial knee-jerk reaction to sell the currency drove it to a two-week low against the dollar. Analysts said it could stay choppy on near-term worries about the impact on a shaky Japanese economy.
Gold slipped but was supported by the safe-haven buying on the earthquake and investor concerns over unrest in the Middle East.
Japanese stock futures fell 2.4 percent following the earthquake, which hit just before the market's close. But players said the slide may not be too deep because major cities and manufacturing facilities were not affected.
But global equity markets were rattled by worries about the festering European debt crisis and Middle East unrest.
"You have huge global macro events happening and everybody is focused on these events. You have had almost this perfect storm over the past two days," said Cort Gwon, chief strategist at HudsonView Capital Management in New York.
US Treasury debt prices were lower on fears that Japanese insurers may need to sell bonds to pay for damages.
The benchmark 10-year US Treasury note was down 5/32 in price to yield 3.3803 percent.
Comments
Comments are closed.