European stock markets slide on US action over Iraq

GMT 09:17 2014 Friday ,08 August

Arab Today, arab today European stock markets slide on US action over Iraq

Brokers monitor market movements at the BGC
London - AFP

Europe's major stock markets fell at the start of trading on Friday, with investors seeking safety after US President Barack Obama authorised air strikes on Iraq, traders said.
Frankfurt's main index dropped below the psychologically important 9,000-points level for the first time since March after Tokyo closed at a two-month low point.
The DAX opened down 1.23 percent to 8,928.19 points, its lowest point since March 14.
London's benchmark FTSE 100 index dropped 0.59 percent to stand at 6,558.50 points compared with Thursday's closing level, while in Paris the CAC 40 index shed 0.86 percent to 4,114.09.
On foreign exchange markets, investors rushed to the yen, seen as a haven currency, helping to push the Japanese currency up against the dollar and euro.
On the eurozone bond market, funds seeking refuge from risk flowed into German and French bonds, pushing up the prices of these instruments and automatically pushing down the fixed interest or yield which they carry in percentage terms.
These indicated borrowing costs for Germany and France fell to record low levels, with the yield on the 10-year German bond, the eurozone benchmark, at 1.034 percent from 1.062 percent late on Thursday. The French 10-year yield fell to 1.468 percent from 1.488 percent.
"Markets were again under pressure Friday morning  as investors continued the flight to safe haven assets," said Spreadex trader Lee Mumford.
"The focus for traders again shifted towards another conflict zone in the Middle East as President Obama announced late last night that he had authorised air strikes... in northern Iraq.
"With geopolitical risks increasing in multiple areas of the world, risk aversion seems to have firmly taken hold," added Mumford.
Markets were being weighed down also by the Russia-Ukraine crisis and investor unease over the latest Israel-Palestinian conflict.
On Thursday, Obama ordered US warplanes back into the skies over Iraq to drop food to refugees and if necessary launch air strikes to halt what he said was a potential "genocide".
The US air armada's first mission was to drop food and water to thousands of members of the Yazidi religious minority besieged by Sunni extremist fighters from the so-called Islamic State (IS). Tens of thousands of Iraqi Christians have also fled.
Obama warned that he had also authorized the military to carry out targeted strikes in support of Iraqi forces to break the Islamists' advance or to protect US advisors working on the ground.
"The rate by which investors are fleeing out of stocks is speeding up as geopolitical tensions continue to increase especially after Russia has started to retaliate in form of counter-sanctions against the West," said Markus Huber, senior analyst at brokers Peregrine & Black.


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