News Column

European Markets Fall As Iraq Events Send Crude Higher

June 13, 2014



PARIS (Alliance News) - The European markets are in negative territory on Friday, after tension escalated in Iraq, sending oil prices higher. Comments by Bank of England Governor Mark Carney also impacted sentiment.


Jihadists aligned with the Islamic State of Iraq and Syria -- ISIS - have captured Mosul, the country's second-largest city, as well as Tikrit, and are moving south towards Baghdad. Reports from Mosul say thousands of Iraqi soldiers threw down their arms and fled.


Crude for July delivery is gaining USD0.56 to USD107.09 per barrel, while gold is losing USD0.4 to USD1273.6 a troy ounce.


Bank of England Governor Mark Carney said the interest rates in the UK could rise sooner than investors expect.


There is already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced, Carney said at the annual Mansion House speech in London on Thursday.


Britain's finance minister George Osborne, who also spoke at Mansion House, said that in a bid to limit risk to financial stability from the housing market, he would give the apex bank more power to curb mortgage lending.


Further, German consumer prices rose year-over-year in May confirming the preliminary estimates, final figures from Destatis showed.


Eurozone employment grew for the second straight quarter in the first three months of the year, Eurostat said. The number of employed rose 0.1% from the fourth quarter of 2013, when there was a similar gain.


China's industrial production and retail sales growth accelerated in May, suggesting that measures adopted by the government to kick start the recovery finally started to bear fruits.


Industrial production grew at a pace of 8.8% year-on-year in May, following April's 8.7% increase, figures from the National Bureau of Statistics showed. The rate came in line with economists' expectations.


At the same time, retail sales advanced by a more-than-expected 12.5% annually in May, faster than the 11.9% rise seen a month ago. Sales were expected to rise by 12.1%.


The Euro Stoxx 50 index of eurozone bluechip stocks is losing 0.82%, while the Stoxx Europe 50 index, which includes some major UK companies, is falling 0.71%.


The German DAX, the French CAC 40 and the UK'sFTSE 100 are falling between 0.9% and 1.1%. Switzerland's SMI is losing 0.4%.


In Frankfurt, Lufthansa is losing 3.6% and Continental is falling 2.5%.


ThyssenKrupp and Daimler are sliding 1.7% and 1.5%, respectively.


Gerry Weber, which reported first half results, is losing 1.3%.


In Paris, Societe Generale is losing 3%. Credit Agricole and BNP Paribas are falling 1.9% and 1.6%, respectively.


Schneider Electric is falling 1.2%. Morgan Stanley cut the stock to ''Equalweight'' from ''Overweight.''

Michelin is losing 2.2% and Axa is sliding 2.1%.


In London, Persimmon is declining 5.3%, Barratt Developments is losing 4.1% and British land is falling 3.7%, in response to Osborne's remarks.


Industrial equipment rental firm Ashtead is dropping 4.3%.


Tullow Oil is gaining 1.8% as crude prices rose. The company refinanced a 2 billion Norwegian kroner exploration loan facility.


The Asian stocks ended mixed, paring early losses, as energy stocks advanced and investors found comfort in Chinese industrial output and retail sales data that came along expected lines.


In the US, futures point to a lower open on Wall Street. In the previous session, stocks fell notably, with escalating violence in Iraq and disappointing retail sales and jobless claims data weighing on the markets.


The Dow and the S&P 500 dropped about 0.7% each, while the tech-heavy Nasdaq fell 0.8%.




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Source: Alliance News


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