(Bloomberg) — Stocks fell Friday together with European and U.S. fairness futures, whereas havens together with sovereign bonds rose, as traders reacted to an assault on a significant nuclear energy plant in Ukraine by Russian troops.
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European contracts fell about 3% and people for the U.S. shed round 1%, slightly off earlier lows after an preliminary spasm of fear eased. Asian equities had been within the crimson, sapped by Japan and Hong Kong.
Ukraine instructed the International Atomic Energy Agency {that a} hearth on the plant “has not affected ‘essential’ equipment” and that there had been no change reported in radiation ranges.
Gains in gold and the greenback moderated, whereas the euro pared a decline. Oil was close to $110 a barrel, trimming a leap of as a lot as 4.8%. A rally in Treasuries lowered the U.S. 10-year yield to lower than 1.80%.
Russian troops started shelling the power — Europe’s largest nuclear plant — on Friday, Ukrainian officers mentioned.
Sentiment was already shaky after Russia’s invasion of its neighbor and transformation right into a pariah within the world economic system. Energy, metallic and grain prices have soared as Russia’s oil and different assets are shunned.
“The headlines about the Russian shelling of that nuclear plant are clearly driving a flight to quality trade,” mentioned Chamath de Silva, senior portfolio supervisor at BetaShares Holdings in Sydney.
Russia’s army motion and sanctions imposed by the U.S. and its allies are creating a variety of dangers. They embrace excessive uncooked materials prices, injury to world confidence that may sap funding and the potential for credit score stress to ripple by means of markets.
The hole between two-year and 10-year U.S. Treasury yields is the bottom since March 2020. The flatter curve factors to expectations for slowing financial enlargement.
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“Rising commodity prices are a big concern for the market, prompting fears of stagflation,” mentioned Fiona Cincotta, senior monetary markets analyst at City Index. “The economic clinch point of this war is commodity prices. Higher energy prices, slowing growth, and surging inflation are not a good outlook.”
Traders are additionally evaluating the financial coverage outlook and awaiting the important thing month-to-month U.S. employment report.
Chair Jerome Powell on Thursday reaffirmed that the Federal Reserve is about to begin a collection of interest-rate hikes to curb inflation, whereas indicating it’ll transfer judiciously and is alert to inflation dangers.
What to look at this week:
Some of the primary strikes in markets:
Stocks
S&P 500 futures fell 0.8% as of 12:38 p.m. in Tokyo. The S&P 500 fell 0.5%
Nasdaq 100 futures slid 0.8%. The Nasdaq 100 fell 1.5%
Japan’s Topix index fell 1.9%
South Korea’s Kospi index misplaced 1.2%
Australia’s S&P/ASX 200 index dropped 0.8%
Hong Kong’s Hang Seng index fell 2.5%
China’s Shanghai Composite index shed 0.6%
Euro Stoxx 50 futures decreased 2.6%
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro was at $1.1029, down 0.3%
The Japanese yen was at 115.35 per greenback, up 0.1%
The offshore yuan was at 6.3236 per greenback
Bonds
The yield on 10-year Treasuries declined seven foundation factors to 1.77%
Australia’s 10-year bond yield was at 2.14%, down three foundation factors
Commodities
West Texas Intermediate crude rose 1.9% to $109.68 a barrel
Gold was at $1,940.04 an oz, up 0.2%
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