European stocks followed Asian shares lower after a news report stoked concern Turkey’s problems are spilling over into the euro zone. The common currency sank, while the dollar advanced alongside Treasuries.
The Stoxx Europe 600 Index declined, dragged down by banks and miners, after the Financial Times reported that the ECB was concerned about the Turkish exposure of some lenders. U.S. equity futures declined alongside most Asian shares. The euro dropped to the weakest level in a year, while the dollar, yen and Treasuries all rallied. Turkey’s lira hit a fresh record low amid the souring of diplomatic relations with the U.S., while Turkish investors are looking to President Recep Tayyip Erdogan to calm their nerves when he speaks Friday for the first time since the latest sell-off began.
“My guess on the euro is that its related to contagion from Turkey,” said Raymond Lee, money manager at Kapstream Capital in Sydney. “At the moment it doesn’t feel like a systemic issue but more a market reaction to the surprise” over the FT report.
Geopolitical tensions between the U.S. and other countries have set the tone for markets this week, with the latest leg of the lira’s downward spiral triggered by a diplomatic spat with America. Earlier in the week, China responded to the Trump administration’s latest trade war volley with additional tariffs of its own. The ruble hit a two-year low after the U.S. announced new sanctions on Russia over the March 4 nerve-agent attack on a former double agent in the U.K.
Elsewhere, Tesla shares fell in after-market trading after CNBC reported that its board planned to meet with financial advisers next week to formalize a process to take the company private. Gold dropped, while oil was steady.
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These are the main moves in markets:
- The Stoxx Europe 600 Index decreased 0.5 percent as of 8:20 a.m. London time.
- Futures on the S&P 500 Index sank 0.5 percent.
- The U.K.’s FTSE 100 Index decreased 0.6 percent.
- Germany’s DAX Index decreased 0.9 percent.
- The MSCI Emerging Market Index decreased 1 percent to the lowest in more than a week on the largest dip in more than a week.
- The MSCI Asia Pacific Index decreased 1.1 percent, the biggest dip in more than a week.
- The Bloomberg Dollar Spot Index gained 0.4 percent to the highest in more than six weeks.
- The euro fell 0.5 percent to $1.1465, the weakest in 13 months.
- The British pound dipped 0.3 percent to $1.2786.
- The Japanese yen climbed 0.2 percent to 110.91 per dollar.
- The Turkish lira sank 4.8 percent to 5.8298 per dollar, the weakest on record.
- The yield on 10-year Treasuries fell four basis points to 2.89 percent.
- Germany’s 10-year yield declined four basis points to 0.34 percent.
- Britain’s 10-year yield fell five basis points to 1.296 percent.
- Italy’s 10-year yield increased four basis points to 2.936 percent, the highest in two months.
- West Texas Intermediate crude declined 0.5 percent to $66.50 a barrel, the lowest in seven weeks.
- Gold decreased 0.3 percent to $1,208.37 an ounce.
— With assistance by Jeremy Herron, Sheldon Reback, and Ruth Carson