December 14, 2017
Monday, September 29, 2014

Wall Street lower amid Hong Kong tensions

US stocks fell today as civil unrest in Hong Kong weighed on investor sentiment, while US Treasury debt prices rose over uncertainty sparked by the protests.

Stocks on Wall Street opened sharply lower following declines in Europe and Asia as Hong Kong democracy protesters defied volleys of tear gas and police baton charges in one of the biggest political challenges for China since the Tiananmen Square crackdown 25 years ago.

Shares of companies exposed to Hong Kong fell, including HSBC and luxury goods group Richemont. HSBC closed down 2.3 percent and Richemont fell 1.7 percent.

Emerging markets took a hit. MSCI's emerging markets index fell 1.45 percent, with Brazilian shares a big drag.

The Brazilian real fell to an almost six-year low and the benchmark Bovespa index notched its biggest one-day drop in more than three years after a poll showed President Dilma Rousseff gaining on challenger Marina Silva ahead of Sunday's election. The Bovespa fell 4.5 percent.

Losses on Wall Street were initially broad, with all 10 of the S&P 500's sectors lower as equity investors shrugged off the latest data showing a stronger US economy. Stocks later pared losses, and utilities, seen as a defensive play, rebounded.

The Dow Jones industrial average closed down 41.93 points, or 0.25 percent, at 17,071.22. The S&P 500 fell 5.05 points, or 0.25 percent, to 1,977.8 and the Nasdaq Composite shed 6.34 points, or 0.14 percent, to 4,505.85.

HSBC, LVMH and other companies exposed to Hong Kong underperformed a broader drop in European stock markets as civil unrest in the Asian city continued.

Hong Kong democracy protesters defied volleys of tear gas and police baton charges to stand firm in the centre of the global financial hub, in one of the biggest political challenges for Beijing since the Tiananmen Square crackdown 25 years ago.

Banks in Hong Kong, including HSBC, Citigroup, Bank of China, Standard Chartered and DBS, temporarily shut some branches and advised staff to work from home or go to secondary branches.

HSBC fell 2.3 percent while Standard Chartered dropped 1.6 percent, making those two banks among the worst-performing stocks on the broader, pan-European FTSEurofirst 300 index, which ended down 0.4 percent at 1,371.11 points.

The luxury goods sector was also affected by the unrest in Hong Kong, since many of the companies in the sector have targeted a growing affluent Chinese clientele in recent years.

Swiss luxury goods group Richemont fell 1.7 percent while French rival LVMH declined by 1.5 percent.

The FTSEurofirst 300 index remains up by around 4 percent since the start of 2014. The index hit a peak of 1,410.93 points on Sept. 19, its highest level since early 2008, but has since eased back from that rally.

Meanwhile, Japan's Nikkei share average rose today with the weak yen supporting sentiment, while risk taking was buoyed after the US economy grew at its fastest pace in 2-1/2 years in the second quarter.

But volume was thin as investors awaited cues, such as from US jobs data due out on Friday.

The Nikkei share average ended 0.5 percent higher at 16,310.64.

However, SoftBank Corp fell 1.2 percent, with investors failing to digest the implications of the telecom giant being in talks to acquire DreamWorks Animation SKG.

The broader Topix added 0.4 percent to 1,337.30 in thin trade, with only 1.85 billion shares changing hands, the lowest since Sept 8. The JPX-Nikkei Index 400 also gained 0.4 percent to 12,163.84.

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Tags:  Stocks  shares  FTSEurofirst  Nikkei  US  Dow Jones  

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