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Monday, 3 March 2014
Yen Falls as Stocks to Ruble Rise on Troop Recall Report
By Nick Gentle and Emma O’BrienMar 3, 2014 10:49 PM PT
The yen slid against major peers while oil, wheat and gold fell and U.S. and U.K. equity futures rallied after a report that Russian President Vladimir Putin had ordered troops back to bases after military exercises concluded amid tensions in Ukraine’s Crimea region.
The yen weakened 0.3 percent to 101.76 to the dollar by 3:45 p.m. in Tokyo after its highest close since Feb. 5. Standard & Poor’s 500 Index (SPA) futures jumped 0.6 percent while contracts on the FTSE 100 Index surged 0.7 percent. A measure of stocks in emerging markets erased declines as Russia’s Micex Index (INDEXCF) climbed 2.5 percent after $55 billion was wiped from the country’s equities yesterday. The ruble strengthened 0.4 percent from a record low versus the greenback and Poland’s zloty surged. Gold fell as much as 1 percent from a four-month high.
Putin’s order came after the exercises near Leningrad finished as scheduled and as U.S. Secretary of State John Kerry heads to Kievafter Russia told the United Nations that its intervention in Ukraine’s Crimea region is legal. The crisis sent global stocks down the most in a month and haven assets soaring yesterday. Chinese lawmakers meet on economic policy starting tomorrow. Federal Reserve vice-chairman nominee Stanley Fischer appears before the Senate.
“This crisis is going to be resolved probably without a shot, with the end result being that Crimea will end up as part of Russia, and without a war,” Andreas Utermann, who helps oversee $442 billion as chief investment officer for Allianz Global Investors, said on Bloomberg TV in Hong Kong. “It’s a short term pain. These are definite buying opportunities. It’s going to stabilize.”
The MSCI Emerging Markets Index was little changed after it plunged the most since Jan. 27 yesterday as Russia’s benchmark gauge plummeted 11 percent.
Kerry’s trip to Kiev, scene of the bloody uprising that precipitated the current crisis, comes after the leaders of the Group of Seven nations condemned Russia’s actions as a clear violation of Ukraine’s territorial integrity. Russia denied a report yesterday that it had given Ukrainian navy ships a deadline to capitulate.
Russia’s ruble climbed 0.3 percent to 50.0130 versus the euro and to 36.3565 against the dollar after the currency closed at a record low yesterday. The Micex is heading for its first gain in six days and its biggest jump since September.
Bank Rossii, which yesterday boosted its key one-week auction rate by 150 basis points to 7 percent as stocks and the ruble tumbled, has about $150 billion for foreign currency interventions, ING Groep NV analyst Dmitry Polevoy wrote in a note to clients late yesterday.
About the same number of stocks rose as fell on the MSCI Asia Pacific Index, which is down 3.1 percent this year, as the number of share transactions in Hong Kong and Japan trailed the 30-day average by at least 23 percent.
Japan’s Topix index capped toward its first increase in five days, buoyed by electrical-appliance makers and real-estate companies. Hong Kong’s Hang Seng Index (HSI) climbed 0.8 percent, extending gains after the report on Russia’s troops.
Gold retreated to $1,340.70 after surging 1.8 percent in the spot market yesterday to the highest close since Oct. 28. Platinum fell to $1,450 an ounce and silver dropped 0.8 percent to $21.266.
The S&P GSCI Spot Index of raw materials shed 0.5 percent after it jumped 1.6 percent in New York yesterday, the most since August, amid concern energy and agricultural supplies will be disrupted.
Wheat, which soared the most since June 2012 yesterday, fell 1.4 percent while corn gave up 0.7 percent after jumping yesterday. Ukraine was set to become the third-biggest corn shipper this year, and ranks sixth for global wheat exports.
Events in the Black Sea area raise questions about medium-term supply capacity for agricultural crops, said Ken Ash, director of trade and agriculture at Organization for economic Cooperation and Development, in an interview in Canberra, Australia.