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Stocks slump on escalating Ukraine tension, gold surges

ukraine tension

Asia markets are set to open lower following sharp falls on US markets overnight. Escalating Ukraine-Russia tension sparked risk-off sentiment sending jitters through global stock markets. ASX 200 futures are down more than 1% and the NZX 50 is down 0.85% this morning.

US stocks

Risk-off sentiment prevailed and the Dow Jones Industrial Average declined 1.78% to post its worst day of 2022, the S&P 500 fell 2.12%, and the Nasdaq slumped 2.88%.

Growth stocks led markets losses, with the technology and communication services dropping 3.06% and 2.96% respectively. Financial stocks also tumbled amid falling bond yields as investors headed to government bonds for safe-haven assets. The defensive sectors, including consumer staples and utilities, outperformed the broader markets, up 0.91% and 0.06% respectively.

On the earnings front, Nvidia fell more than 7% despite beating earnings expectations. Cisco shares were up by 3% on a strong earnings report. Walmart rose more than 3% amid better-than-expected earnings and a positive outlook. DoorDash jumped 10% after the company topped revenue expectations.

The US jobless claim figure was at 248,000 for the week ended by February 13, more than the expectation of 218,000.

Treasuries

The US bond yields fell due to risk-off. The 10-year US Treasury yield fell 1.974%, and the 2-year Treasury yield was down to 1.479%.

Commodities

Safe-haven asset prices rose with gold futures up $US30, to $US1901 per ounce, a high last seen in June 2021.

WTI crude oil futures slid 2%, to $US91.78  as investors weighed the possibility of new crude supplies from Iran against renewed geopolitical tension. Iran is close to accepting a deal on its nuclear program. A deal could mean the release of about 1.3 million barrels a day of crude supply, helping to ease a tight global market.

Currencies

The US dollar weakened against most of the other major currencies due to falling US bond yields.  Japanese Yen and Swiss Franc strengthened as safe-haven currencies. USD/JPY fell 0.5% to 114. 90, the lowest in two weeks. The Euro dollar fell slightly against the greenback. Canadian dollar softened due to a sliding oil price.

Cryptocurrencies

The crypto markets tumbled, Bitcoin fell 7.8%, to $US40,643, and Ethereum was down 8.47%, to $US2,888.  


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