Growing tension between the West and Russia ahead of Ukraine’s weekend referendum in Crimea pushed down stocks on major world markets yesterday and drove up buying of safe-haven gold and the yen.
Financial markets watched nervously as the West increasingly talked about sanctions and Russia hit back with promises of retaliatory measures and displays of military prowess. The vote being held on Sunday by pro-Moscow authorities is to determine if Crimea will join Russia.
The MSCI global market index was down 0.5 per cent and was on track for a loss of about two per cent for the week, while gold prices reached their highest level in six months. Spot gold rose as much as 1.4 per cent to its highest level since September 9, and was last up one per cent at $1,384.20 an ounce.
US stocks were little changed and all three major indexes were on track for a weekly decline.
The Dow Jones industrial average rose 1.38 points or 0.01 per cent, to 16,110.27, the S&P 500 gained 0.24 points or 0.01 per cent, to 1,846.58 and the Nasdaq Composite dropped 1.609 points or 0.04 per cent, to 4,258.811.
The FTSEurofirst 300 index of top European shares closed down 0.7 per cent. Shares of companies most exposed to Russia fell, including Danish brewer Carlsberg, down 0.5 per cent.
Latin American stocks also fell, with Mexico’s IPC stock index down 0.4 per cent.
In the foreign exchange market, the latest developments in the Ukraine crisis sent the safe-haven yen soaring against both the dollar and the euro. The yen was headed for its biggest weekly gain in more than a month against the dollar.
The euro fell as much as 0.5 per cent against the yen in early US trading before trimming losses to trade 0.25 percent lower at 140.88 yen. The dollar fell 0.5 per cent to 101.36 yen.
On the week, the dollar has lost 1.7 per cent, on track for its biggest loss since late January.
US Treasuries prices inched up on the Ukraine worries and after data showed a dip in US consumer sentiment. The 10-year US Treasury note was last up 1/32 in price to yield 2.648 per cent, compared with a yield late Thursday of 2.653 percent.
US economic data showed consumer sentiment weakened in early March as an unusually harsh winter appeared to dim views on the economy’s prospects.
Foreign central banks’ overall holdings of US marketable securities at the Federal Reserve plunged in the latest week, data from the US central bank showed.
In the oil market, Brent crude was up 87 cents at $108.26 a barrel, while US crude futures rose 67 cents to settle at $98.87.
Copper, whose demand is seen falling as Chinese economic growth slows, edged higher but was down sharply for the week.
Benchmark three-month copper on the London Metal Exchange, untraded at the close, was bid at $6,468.50, up 0.8 per cent from Thursday’s close. It sank to a 44-month low of $6,376.25 on Wednesday.