Market Update & Important Indicators
U.S. stocks extended their losses Thursday afternoon, putting major indexes on track for slight weekly losses. All of the S&P 500's sectors were in negative territory, dragged down by losses in materials and energy stocks. Both the Dow Jones and the S&P fell 0.9% to close at 17,906 and 2,096 respectively. Australian stocks slumped 1.4% Thursday after rising global bond yields diminished the appeal of dividend plays, putting the market on track for its worst weekly performance in three years.
Stock prices slumped and European government-bond prices plunged anew before staging a recovery, the latest sign of the volatility rattling markets as investors struggle to reassess an increasingly murky global economic outlook. Central Bank chief Mario Draghi asserted that the bank's 1 trillion-euro stimulus program is working to bolster economic output in the single-currency zone and reiterated his intent to see the program through. The statements, taken by many traders as a sign that a recent government-bond rally went too far in pushing the yields of many bonds near zero, fuelled a selloff in the region's benchmark debt issue, sending the yield on the 10-year German bund to its highest level this year.
China's stock market suffered one of its biggest falls this year before staging a dramatic recovery to end in positive territory, adding to a week of large and sudden moves amid jitters over a clampdown on lending to investors. The Shanghai Composite Index, which had been up as much as 0.7% earlier in Asia trading, fell as much as 5.3% after the midday break Thursday before recovering almost as rapidly, closing up 0.8%.
Metals on the LME were down across the board. Copper, nickel and zinc spot fell 1.57%, 0.4% and 1.4% respectively. This resulted in copper falling below the US$6000/t mark again. Gold was also down, falling 0.7% to 1,176/oz, while Brent rose 0.8% to 63.88/bbl. The AUD/USD is trading at 0.768.
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