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Stocks dropped around the world, with European markets snapping the longest rally since October, as investors sold technology shares. Spanish and Italian bonds fell and Brent crude declined.
The MSCI All-Country World Index slipped 0.3 percent at 7:20 a.m. in New York. The Stoxx Europe 600 Index fell 1 percent. Standard & Poor’s 500 Index futures lost 0.5 percent and Nasdaq 100 Index futures slipped 0.9 percent. The yield on Spain’s 10-year bond rose six basis points to 3.21 percent. Corporate bond risk in Europe rose for the first time in seven days. Brent declined 1.1 percent after Libyan rebels agreed to reopen oil ports.
The Nasdaq Composite Index (CCMP) slid the most in two months on April 4 amid concern that valuations on the world’s best-performing industry have advanced too far. Federal Reserve Bank of St. Louis President James Bullard will speak today after a lower-than-estimated U.S. payrolls number last week. Bonds fell after European Central Bank Governing Council member Ewald Nowotny said there’s no immediate need for further action on new stimulus.
“European markets are following the negative close in the U.S.,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “The favorites of the past few months, such as technology and biotechnology stocks, seem to be losing some of the glamor.”
Techs Slide
Five shares declined for every one that advanced in the Stoxx 600, with trading volumes 15 percent less than the 30-day average, according to data compiled by Bloomberg. A gauge of technology stocks lost 1.7 percent, the biggest decline among 19 industry groups, with ARM Holdings Plc falling 2.2 percent and Nokia Oyj sliding 2.9 percent.
Holcim Ltd. and Lafarge SA advanced more than 1 percent each after agreeing to merge, creating the world’s biggest cement company with more than $40 billion in sales.
Altice SA jumped 10 percent, while Bouygues SA (EN) slumped 5.3 percent, after Vivendi SA agreed to sell its phone unit SFR to Altice in a deal valued at more than 17 billion euros ($23.3 billion), rebuffing Bouygues’s sweetened offer.
The S&P 500 fell 1.3 percent on April 4 and the Nasdaq Composite Index lost 2.6 percent.
More than 1 million bearish options on an exchange-traded fund tracking the index of technology stocks changed hands that day for the most trading in puts since May 7, 2010, the day after $862 billion was erased from the value of U.S. equities in a matter of minutes.
Industrials Favored
With Twitter Inc. down 32 percent this year, biotechnology shares closing in on a bear market and high-frequency traders getting pilloried, U.S. investors are returning to industrials. An ETF tracking S&P 500 airlines, trucking companies and machinery makers rallied 1.6 percent last week and saw the value of its assets increase by the most ever, data compiled by Bloomberg show.
The ruble weakened 0.7 percent against the dollar, the biggest decline among 24 emerging markets, and Russia’s Micex Index dropped 1.7 percent in Moscow, the most in three weeks. The yield on Ukraine’s 2023 bond rose seven basis points to 8.74 percent and the nation’s benchmark stock gauge dropped 2 percent.
Protesters with Russian flags stormed administration offices in the cities of Donetsk and Luhansk, calling for a boycott of the May 25 presidential election. A group temporarily seized offices in Kharkiv before the building was freed.
Hungary Elections
Hungary’s forint declined 0.4 percent against the euro, retreating from the strongest level in two months, as Prime Minister Viktor Orban won yesterday’s parliamentary election to earn a second term. The yield on 10-year bonds increased three basis points to 5.61 percent, while the BUX stock index rose 0.3 percent.
Nigeria’s 2023 dollar-denominated bond gained, with the yield dropping six basis points to 5.86 percent, after a data overhaul by the Abuja-based statistics bureau showed the country surpassed South Africa to become the continent’s largest economy.
Abu Dhabi stocks advanced for a second day, led by Aldar Properties PJSC. The real-estate developer jumped to the highest level in almost four years after saying it’s considering an initial public offering of its property management unit.
The S&P GSCI gauge of 24 commodities declined 0.5 percent, as Brent fell to $105.56 a barrel and West Texas Intermediate oil dropped 0.6 percent to $100.52 a barrel.
Libya Oil
Libyan state National Oil Corp. is “free to start exports any time,” Ali Al-Hasy, spokesman of self-declared Executive Office for Barqa region, said by phone. Libya’s output shrank to 250,000 barrels a day last month, compared with 1.4 million a year earlier, a Bloomberg News survey of producers and analysts shows. Rebels seeking self-rule in the eastern part of the country have disrupted production and shipments.
A measure of implied price swings on Group-of-Seven nation currency markets fell to the lowest in more than six years. The JPMorgan G7 Volatility Index dropped to 6.89 percent today, the least since August 2007. The gauge has averaged 10.96 percent in the past five years.
The yield on 10-year Italian securities increased three basis points to 3.20 percent, after falling to a record-low 3.14 percent. The yield on equivalent-maturity German bunds was at 1.56 percent.
Treasury 10-year notes yielded 2.72 percent after the rate dropped eight basis points on April 4.
The Markit iTraxx Europe index of credit-default swaps on 125 investment-grade companies in Europe increased one basis point to 71.
The euro strengthened 0.2 percent to $1.3727. The yen gained 0.1 percent to 103.19 per dollar. The Japanese currency was at 141.69 yen per euro.
(Source: Bloomberg)
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