A roundup of trading on major world markets:
NEW YORK – US stocks have closed down as the Bank of Japan’s shocking call to cap monetary stimulus continued to rattle investors while a late day decline in Apple shares on remarks by billionaire investor Carl Icahn added to selling pressure.
The benchmark S&P 500 had its worst day in three weeks on Thursday, losing 19.26 points, or 0.92 per cent, to 2,075.89, the Dow Jones industrial average fell 208.81 points, or 1.16 per cent, to 17,832.74 and the Nasdaq Composite dropped 57.85 points, or 1.19 per cent, to 4,805.29.
“This really personifies how important central bank policy is on the market,” said Jack Ablin, chief investment officer at BMO Private Bank.
Stocks fell early in the day on the BOJ’s decision to hold steady in the face of soft global demand and a rise in the yen, jarring markets particularly after media reports that the central bank would likely go deeper into negative interest rates.
Wall Street dipped further late in the day, led by a decline in Apple stock.
Shares of Apple, already suffering from disappointing earnings, took another hit after billionaire investor Carl Icahn said he no longer has a position.
Icahn, in an interview with cable television network CNBC, also said he was “still very cautious” on the US stock market and there would be a “day of reckoning” unless there was some sort of fiscal stimulus.
LONDON – European stock indexes closed little changed after after the Bank of Japan surprised markets by holding interest rates steady and declining to adopt more stimulus, pushing the yen sharply higher against major currencies.
The Japanese currency recorded its biggest one-day gains against the US dollar, euro and sterling since March 2011.
The BOJ’s decision was particularly jarring in the face of soft global demand and after earlier media reports said the central bank intended to cut rates deeper into negative territory.
London’s FTSE 100 was flat, lifting just 2.49 points, or 0.04 per cent, to 6,322.40 while Germanys DAX gained 21.32 points, or 0.21 points, to 10,321.12.
HONG KONG – The lack of fresh stimulus from the Bank of Japan sent the yen soaring and stocks into the red, half a day after the US Federal Reserve signalled it too was hitting the policy pause button.
The yen surged almost three per cent against both the US dollar and the euro in a sharp reaction to the BOJ inaction, putting it on course for its biggest jump against the greenback since February and in five years against the euro.
Tokyo’s Nikkei slumped 624.44 points, or 3.61 per cent, to close at 16,666.05, while Shanghai fell 5.33 points, or 0.17 per cent, to 3,166.58.
But, the Hang Seng rose 26.43 points, or 0.12 per cent, to 21,388.08.
“The market was expecting something from the BOJ and they did not deliver so the market has basically wiped out all the rally in dollar/yen of the last couple of weeks,” said Societe Generale FX strategist Alvin Tan.
“For the last two to three years the big theme in the market was monetary divergence. But in the last few months the legs have really been cut off that … so currencies are all over the place.”
WELLINGTON – The S&P/NZX50 Index gained 39.58 points, or 0.6 per cent, to 6,789.98.
