Emerging shares slump as gold shares sink

Date:

Emerging sharesEmerging-market stocks retreated, set for the biggest weekly slide in four months, as growing speculation that the Federal Reserve will curtail economic stimulus drove a rally in the United States dollar and sank gold producers.

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Bloomberg News reported that the MSCI Emerging Markets Index decreased 1.2 per cent to 997.64 at 12:53pm on Friday in New York, extending its slump for the week to 2.9 per cent. Benchmark stock gauges from South Africa to Russia and China dropped more than 1 per cent, while the Borsa Istanbul National 100 Index posted the second-biggest decline among 94 world equity gauges tracked by Bloomberg. DRDGold Limited and AngloGold Ashanti Limited fell at least 3.7 per cent in Johannesburg as the precious metal drove losses in commodities.

The dollar touched a two-month high, Treasuries dropped the most in four months and gold tumbled as data showed US employers added more workers than forecast, fueling speculation the Fed may start reducing stimulus by the end of this year. The gauge for stocks in developing nations has retreated as much as 16 per cent since May 22, when the US central bank signalled its $85bn asset-buying programme could be trimmed if the economy showed sustained improvement.

“The outlook is positive for the US and that might lead people to think that the Fed will begin tapering sooner rather than later,” John Carey, a portfolio manager at Pioneer Investment Management who manages $200bn in assets globally, said by phone from Boston. “That could lead to some strength in the dollar and rising interest rates. Markets react sometimes in exaggerated ways and people are maybe more fearful than is justified and that may be what’s going on now.”

Babatunde Akinsola
Babatunde Akinsolahttps://naija247news.com
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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