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September 27, 2017

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Global stocks mixed amid Spanish bailout uncertainty

LONDON/HONG KONG--World stock markets were mixed and the euro steadied on Tuesday as investors kept a cautious eye on developments in Spain after initial enthusiasm over the country's massive bank bailout faded badly.

European indices rose slightly in morning deals, while Asian stock markets mostly closed lower after losses on Wall Street overnight as investors looked past the headlines and noted the impact of the deal on Spain's debt burden.

Spanish 10-year government bonds yields — the rate of return earned by investors — rose to 6.590 percent from 6.487 percent, indicating nervousness among traders.

Any yield above 6.0 percent is widely judged to be unsustainable over the longer-term and shows the market is increasingly skeptical that the bank bailout accord with the EU can resolve Spain's problems.

"Despite Spain's banks being better off to the tune of 100 billion euros, yields on Spanish government debt have surged above the danger level as traders interpret this as an escalation of the debt crisis and not as a preventative measure that policy makers had tried to spin things," said Jonathan Sudaria, a dealer at London Capital Group.

In midmorning deals, London's FTSE 100 index of leading companies climbed 0.13 percent to 5,439.27 points, Frankfurt's DAX 30 gained 0.25 percent to 6,156.41 points and in Paris the CAC-40 rose 0.39 percent to 3,054.60.

Madrid's IBEX 35 index edged down 0.04 percent to 6,513.90 points in choppy trade while Milan was off 0.13 percent.

Asian markets mostly fell on Tuesday following losses on Wall Street as initial excitement over a multi-billion-dollar bailout for Spain's banks faded.

The optimism over the weekend deal worth up to US$125 billion was replaced by concerns about the practicalities of implementing the bailout and fears it would not be enough to avert a broader catastrophe in the eurozone.

Tokyo was 1.02 percent lower, shedding 88.18 points to 8,536.72 while Seoul fell 0.66 percent, or 12.30 points, to 1,854.74.

Hong Kong fell 0.43 percent, or 81.07 points, to 18,872.56, while Shanghai closed down 0.70 percent, or 16.07 points, at 2,289.79.

Sydney however rose 0.23 percent, or 9.2 points, to 4,072.9 as it caught up with regional gains from Monday when it was closed for a holiday.

Gold was at US$1,590.50 an ounce at 1045 GMT, compared with US$1,592.30 late Monday.

In other markets:

— Singapore closed up 0.33 percent, or 9.27 points, at 2,797.08.

Oversea-Chinese Banking Corp. was up 1.20 percent at SG$8.45 while oil rig maker Keppel Corp. gained 1.20 percent to SG$10.10.

— Taipei closed 0.68 percent, or 48.15 points, lower at 7,072.08.

Taiwan Semiconductor Manufacturing Co. was 1.24 percent lower at NT$79.4 while Hon Hai Precision lost 1.55 percent to close at NT$82.5.

— Wellington fell 0.83 percent, or 28.64 points, to 3,425.60.

Telecom eased 1.9 percent to NZ$2.39, Fletcher Building lost 1.1 percent to NZ$6.28 and Air New Zealand dropped 1.16 percent to NZ$0.86.

— Kuala Lumpur fell 0.15 percent, or 2.34 points, to 1,576.07.

Budget carrier AirAsia fell 0.27 percent to 3.68 ringgit, while plantation giant Sime Darby eased 0.21 percent to 9.73 rupiah. Telecoms provider Maxis gained 1.70 percent to 6.59 ringgit.

— Jakarta shed 0.35 percent, or 13.64 points, to end at 3,852.58.

Bank Rakyat fell 1.6 percent to 6,050 rupiah, BCA slid 0.7 percent to 7,150 rupiah while Telkom rose 2.7 percent to 7,600 rupiah.

— Bangkok closed up 0.42 percent, or 4.86 points, at 1,162.93.

PTT gained 1.56 percent to 325.00 baht, while Banpu lost 1.26 percent to 472.00 baht.

— Mumbai finished 1.17 percent, or 194.79 points, higher at 16,862.80.

— Manila was closed for a public holiday.

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