• Asian shares drop to 17-month low
  • Egypt’s market retreats 3.6 percent, Saudi Arabia’s index adds 0.6 percent
  • Oil prices rise on tightening supply
  • Dollar drops, gold edges higher

Global markets

Asian shares dropped on Tuesday to their lowest level since May last year as China’s central bank fixed its yuan at 6.9019 per dollar, thereby breaching the 6.9000 barrier and leading speculators to push the dollar up to 6.9320 in the spot market.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell another 0.2 percent in early trading.

“Risk sentiment is in a foul mood and stocks are sinking everywhere,” said analysts at JPMorgan in a note, according to a Reuters report.

“With Chinese economic momentum continuing to weaken alongside increasing pressure from the U.S., currency weakness is the obvious release valve,” they warned. “A lurch through the 7.0 level by year end is possible.”

On Wall Street overnight, The S&P 500 lost 0.04 percent and the Nasdaq Composite 0.67 percent, while the Dow rose 0.15 percent as defensive stocks found buyers.

Middle East markets

Egypt’s stock market dropped 3.6 percent on Monday as 29 of 30 stocks fell, underperforming the MSCI emerging market index.

Exchange data showed Monday's selling was heavily concentrated among local investors, who were hit by margin calls. Non-Arab foreign investors were net buyers by a considerable margin, the data showed.

In Saudi Arabia, the index rose 0.6 percent with Al Rajhi Bank up 1.6 percent and Samba Financial Group gaining 1.6 percent.

The Gulf's largest dairy company, Almarai Co, dropped 2.9 percent after reporting a fall in third-quarter profit on Sunday.

Advanced Petrochemical extended losses, falling 2.1 percent after reporting a slight fall in quarterly net income, also on Sunday.

Dubai's index closed 0.6 percent lower, Emirates NBD fell 1.6 percent. Neighbouring Abu Dhabi’s index gained 0.3 percent.

Qatar’s index dropped 0.3 percent, Kuwait’s index edged up 0.04 percent while Bahrain’s index rose 0.1 percent and Oman’s index edged down 0.2 percent.

Oil prices

Oil prices rose on Tuesday on tightening supply as market participants took into considerations the United States sanctions on Iran that will start from November 4.

Brent crude was up 26 cents, 0.3 percent, at $84.17 a barrel by 0244 GMT.

U.S. West Texas Intermediate (WTI) crude futures were down by 24 cents or 0.3 percent, at $74.53 a barrel.

Currencies

The dollar dropped in early trading on Tuesday against the yen.

“The rise of U.S. Treasury yields is causing a correction of U.S. equity markets, which is typically a risk averse situation and causes the stronger yen,” Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo, told Reuters.

The dollar shed 0.2 percent to 113.04 yen on Tuesday.

Against a basket of its rivals =USD, the greenback was steady at 95.774, not far off a seven-week top of 96.127 hit last week.

Precious metals

Gold prices edged up on a weaker dollar on Tuesday.

Spot gold XAU= was up 0.1 percent at $1,189.23 an ounce at 0102 GMT. It fell 1.2 percent on Monday, its biggest one-day percentage fall since August 15, and also touched a more than one-week low of $1,183.19.

U.S. gold futures GCv1 rose 0.3 percent to $1,192.70 an ounce.

(Writing by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@thomsonreuters.com)

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