[정품]금융전문가 1.5

Dubai default fears spook investors

By Jamie Chisholm, Global Markets Commentator

Published: November 26 2009 07:09 | Last updated: November 26 2009 21:36

21:20 GMT. Global stock markets endured heavy selling on Thursday as investors were spooked by the spectre of a default by Dubai and after a febrile foreign exchange market saw the yen surge to a 14-year high against the dollar.

The turmoil caused a flight to less risky assets. Gold, which had challenged $1,200 in Asian trading, fell back from its highs and money flowed into havens such as German government bonds.

US markets were closed for the Thanksgiving holiday, but electronic trading of the benchmark S&P 500 equity futures contract had shown a potential drop on Wall Street of 2.2 per cent.

In Europe, the FTSE 100 lost 3.2 per cent at 5,194.1, its worst day since March, while the FTSE Eurofirst 300 fell 3.3 per cent to 988.1.

Initial weakness was blamed on a sell-off in Asia that appeared to be prompted by the yen’s sudden rise. But as the European trading day progressed, it became clear it was Dubai World’s difficulties that had hit a particular nerve, reminding investors of the lingering damage wrought by the financial crisis.

Banking stocks tumbled on concern about their potential exposure to Dubai. Indeed, the cost of insuring against default by the emirate jumped, with Reuters reporting the Dubai five-year credit default swap being quoted as high as 500-550 basis points. This means it would cost about $500,000 a year to insure $10m of Dubai’s debt. On Tuesday it would have cost about $360,000.

Greek and Irish government five-year credit default swaps also moved higher as nations with supposedly precarious fiscal positions were punished. In contrast, investors sought out comparative haven assets, pushing the yield on the German Bund down by 8 basis points to 3.16 per cent.

Earlier in the trading day the focus had been on a volatile period in the foreign exchange markets.

The Nikkei 225 fell to a fresh four-month low, off 0.6 per cent to 9,383.2, as exporters wilted in response to a sudden bounce by the yen. The Japanese unit – considered by many to be the haven currency of choice – suddenly burst through Y87 to the dollar at 03:20 GMT.

After breaching this level, the buying accelerated, taking the yen to Y86.30, a fresh 14-year high versus the greenback. It also made headway against the euro.

Comments from Hirohisa Fujii, Japan’s finance minister, that he was watching forex market moves very closely and that the country could take appropriate steps if moves were ”abnormal”, initially helped pare some of the yen’s gains.

But as the European session advanced, investors started to move with ever greater force into the so-called haven currencies, boosting the yen and dollar, most notably at the expense of the euro.

Later the yen was up 1.8 per cent against the euro at $129.79, and had gained 1 per cent against the otherwise stronger dollar at Y86.45.

The dollar, after dipping in Asia to a fresh 15-month low on a trade-weighted basis, later revelled in traders’ reduced risk appetite, bouncing 0.8 per cent versus the euro to $1.5013. Against a basket of currencies it recovered from 74.17 to later trade 0.7 per cent higher but was still just under the crucial 75.0 mark.

Gold took advantage of the early frantic forex action to hit another high of $1,194.90 an ounce. But it was later down 0.3 per cent at $1,188.38 as the dollar found its footing.

Equity investors across Asia had appeared concerned about the implications of such a sharp rise in haven currencies.

Mainland China’s benchmark, the Shanghai Composite, slid 3.6 per cent to 3,170.9, also on continuing worries regarding the banking sector, while Hong Kong’s Hang Seng fell 1.8 per cent to 22,216.3 as a share debut by China Minsheng Bank disappointed. In Australia, the S&P/ASX 200 lost 0.3 per cent to 4,708.6.

By late afternoon in New York, Asian futures were down, pointing to another difficult day for global markets.

Oil dipped 2.2 per cent to $76.23 in electronic trading, though pits and Wall Street were closed on Thursday for the Thanksgiving holiday.

Overnight, US equities had managed to just finish at a new high for the year.

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