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|11 October, 2018

Thursday outlook: Global markets drop sharply

Asian shares tracked a steep drop on Wall Street and were trading lower on Thursday. Oil prices follow global markets lower, a rise in U.S. inventories helped dragging prices lower

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 11, 2018.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 11, 2018.

REUTERS/Brendan McDermid
  • Asian shares drop, tracking a retreat on Wall Street
  • Dubai and Qatar’s indices add gains on Wednesday
  • Oil prices retreat on higher U.S. inventory
  • Dollar steadies, gold prices retreat

Global markets

Asian shares dropped in early trading on Thursday tracking a steep drop on Wall Street.

MSCI’s broadest index of Asia-Pacific shares outside Japan shed 2.7 percent to its lowest in 18 months.

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Overnight on Wall Street, stocks fell to their worst level in eight months. The S&P 500 ended Wednesday with a loss of 3.29 percent and the Nasdaq Composite 4.08 percent, while the Dow shed 2.2 percent.

“Equity markets are locked in a sharp sell-off, with concern around how far yields will rise, warnings from the IMF about financial stability risks and continued trade tension all driving uncertainty,” summed up analysts at ANZ.

“Equity markets are locked in a sharp sell-off, with concern around how far yields will rise, warnings from the IMF about financial stability risks and continued trade tension all driving uncertainty,” summed up analysts at ANZ, according to a Reuters report.

Middle East markets

Dubai’s index added 1.2 percent on Wednesday as real estate shares added gains. Emaar Properties gained 2.5 percent to 5.00 dirhams and DAMAC Properties rose 3.6 percent. Emirates NBD gained 2.5 percent and Dubai Islamic Bank added 0.2 percent.

Neighbouring Abu Dhabi’s index edged down 0.1 percent.

Saudi Arabia’s index dropped 0.9 percent as Al Rajhi Bank fell 1.9 percent and Saudi Basic Industries dropped 1.3 percent.

Qatar’s index gained 1.3 percent boosted by its banking sector. Qatar National Bank rose 2.2 percent, Qatar Islamic Bank was up 1.1 percent and Masraf Al Rayan added 1.1 percent.

Egypt's blue-chip index, which has fallen 15 percent since the end of August, was up 0.2 percent as Commercial International Bank rebounded 1 percent.

Kuwait’s index dropped 0.3 percent, Bahrain’s index also fell 0.3 percent and Oman’s index dropped 0.2 percent.

Oil prices

Oil prices dropped on Thursday extending losses from yesterday’s session as global markets fell sharply and on higher inventories in the United States.

The American Petroleum Institute said on Wednesday that U.S. crude stockpiles rose more than expected last week, while gasoline inventories increased and distillate stocks drew.

The U.S. Energy Information Administration (EIA) is due to release official government inventory data later in the day.

Brent crude futures were down $1.22, or 1.5 percent, at $81.87 a barrel by 0237 GMT. They earlier touched their lowest since September 28 at $81.61, after closing 2.2 percent lower on Wednesday.

U.S. West Texas Intermediate (WTI) crude futures were down by $1, or 1.4 percent, at $72.17, having also fallen to their lowest since September 28. They dropped 2.4 percent in the previous session.

Currencies

The dollar steadied on Thursday on weaker equities.

The dollar index against a basket of six major currencies dropped 0.11 percent, after hitting a high of 95.79 in the previous session.

Precious metals

Gold prices were trading lower early on Thursday.

Spot gold was down 0.2 percent at $1,192.41 an ounce at 0105 GMT.

U.S. gold futures were up 0.2 percent at $1,195.70 an ounce.

(Writing by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@thomsonreuters.com)


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