Asian Markets are going to fall on opening as European and US stock markets tumbled overnight as news broke of the failure of the US deficit cutting talked hit the market.
The U.S.12 member congressional committee, charged with reducing the budget deficit by at least $1.2 trillion over the next 10 years or otherwise triggering automatic spending cuts, was facing almost certain collapse, barring an unlikely 11th-hour breakthrough.
The sudden focus on U.S. deficit negotiations came as fears on the euro-zone debt crisis also sharpened. Moody’s Investors Service said it may change its stable outlook on France’s triple-A rating to negative in the coming months, and that German banks have sizable exposures to troubled euro-zone countries.
The Dow Jones Industrial Average closed down 248 points, or 2.11%, at 11547.31. All 30 blue-chip components were in the red. The Dow is also now down for the year after last night’s selloff, the first time since mid-October.
The EURUSD fell on the news from Moody’s over France’s AAA credit rating, falling to as low as 1.3430 before new broke of the failing in Washington. Prices last traded at 1.3504
WTI Oil dropped for the third day, on the news lawmakers wont agree on budget cuts, crude traded down to $94.24 overnight before recovering to close the session slightly down. Crude oil last traded at $97.12
Gold prices fell below $1700/ounce for the first time in four weeks as worries about a potential credit crunch in Europe and budget gridlock in the U.S. spurred traders to sell the precious metal to raise cash.
INDICES
Last Traded
SPI 200 future 4121
S&P500 Index 1192.98
Dow Jones 11547.31
FTSE 100 Index 5222.60
COMMODITIES
Last Traded
Gold 1681.30
Oil (Nymex) 97.12
CURRENCIES
Last Traded
AUDUSD .9852
EURUSD 1.3504
GBPUSD 1.5653
USDJPY 76.94
Source
Bloomberg, Dow Jones News