Stock prices around the world declined yesterday ahead of the first US presidential debate between Hillary Clinton and Donald Trump, while oil prices rose in advance of an informal Opec meeting in Algeria on hopes for an output cut.
Half of America’s likely voters will rely on the presidential debates to help them make their choice between the two major US party nominees in the November 8 election, according to a Reuters/Ipsos poll released yesterday.
“The polls have both candidates neck-to-neck. The debates might increase the lead of one over the other and that’s what the market is fearful of,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
In early trading, the Dow Jones industrial average was down 137.96 points, or 0.76 per cent, at 18,123.49, the S&P 500 was down 13.56 points, or 0.63 per cent, at 2,151.13 and the Nasdaq Composite shed 39.86 points, or 0.75 per cent, to 5,265.89.
“We feel that with central bank meetings behind us, the focus will now be more on political risks and so investors have been spending more time trying to understand the potential implications for a Trump victory,” said Mark Dowding, co-head of investment grade debt at BlueBay Asset Management.
He said that while a Trump victory could be viewed internationally as bad for global assets, US domestic investors were more sanguine.
European stocks fell, dragged down by a pullback in the shares of major banking and energy companies. Deutsche Bank shares hit a record low on worries about Germany’s biggest lender in the wake of a massive $14 billion demand from the US Department of Justice to settle claims on bad mortgage-backed securities.
Europe’s broad FTSEurofirst 300 index dropped 1.6 per cent to 1,337.57. It was on track for its steepest single-day fall since July 6.
Japan’s Nikkei stock index ended 1.3 per cent lower. The MSCI world equity index, which tracks shares in 45 nations, fell 3.5 points, or 0.83 per cent, to 416.52.
Oil prices rebounded after Algeria’s energy minister said on Sunday that all options were possible for an output cut or freeze at this week’s informal meeting of OPEC producers. Brent crude was last up 89 cents, or 1.94 per cent, at $46.78 a barrel. US crude was last up 87 cents, or 1.96 per cent, at $45.35 per barrel.
Bank of Japan Governor Hiruhiko Kuroda said earlier yesterday the central bank would use all tools necessary to get inflation back to its two per cent target, but his remarks did little to shift a conviction among bank analysts that the Bank of Japan is increasingly unable to weaken the yen.
The dollar shed over 0.5 per cent to 100.33 yen, moving back toward a one-month low of 100.10 touched last week, while the euro weakened 0.2 per cent at 113.07 yen.