Growing pressure on Russia drives global markets down
AP and AFP
July 22, 2014, 12:02 am TWN
BEIJING/HONG KONG--World stock markets remained on the back foot Monday as tensions grew between Russia and the West over the downing of an airliner in eastern Ukraine.
In Europe, Germany's DAX was off 0.7 percent at 9,654.54 and France's CAC-40 shed 0.4 percent to 4,315.92. Britain's FTSE 100 dropped 0.3 percent to 6,732.16.
The shooting down last week of the Malaysia Airlines plane with 298 people aboard has rattled markets, which worried about how Western governments, already alarmed by Russia's support for rebels in Ukraine's east, would react.
Asian markets were mixed on Monday, as bargain-hunting was offset by lingering geopolitical concerns after last week's downing of a Malaysian airliner in Ukraine.
With traders still on edge after Thursday's tragedy, which the United States has said was caused by pro-Russian rebels, the dollar retreated against the safe-haven yen.
Sydney added 0.15 percent, or 8.2 points, to close at 5,539.9 and Seoul was marginally lower, dipping 0.92 points to 2,018.50. Shanghai lost 0.22 percent, or 4.59 points, to end at 2,054.48 while Hong Kong shed 0.29 percent, or 67.65 points, to 23,387.14.
Tokyo was closed for a public holiday.
With few catalysts to drive business, investors took the opportunity in early trade to pick up cheap shares after a broad sell-off Friday in response to the Malaysia Airlines plane crash, which fanned already high tensions about Ukraine.
However, the early advances were pared by worries the months-long crisis has moved into another and possibly more dangerous phase.
With the United States blaming Moscow over the downing of MH17, Russian President Vladimir Putin has promised to cooperate in an investigation into the tragedy which took almost 300 lives.
Shares in Malaysia Airlines ended unchanged at 0.20 ringgit after the loss of its flight MH17 in the Ukraine last Thursday.
The firm slumped 11 percent on Friday as investors were spooked by the second air tragedy to hit it since March, when an airliner went missing over a remote part of the Indian Ocean. The latest crisis has raised fears the airline, which has lost almost 40 percent of its value this year, will collapse.
Also depressing sentiment was news of Israel's ground offensive in Gaza, fuelling concerns about the tinderbox region.
In New York on Friday the three main indexes bounced back from the previous day's falls, with bargain-buying backed up by strong earnings from Google.
The Dow rose 0.73 percent, the S&P 500 jumped 1.03 percent and the Nasdaq rallied 1.57 percent.
However, despite the equity advances investors were still buying into the lower-risk yen as a hedge against political uncertainty.
The dollar bought 101.24 yen against 101.36 yen on Friday in New York, while the euro fetched 136.90 yen compared with 137.12 yen.