BREAKING NEWS

Now Reading:

Emerging market jitters hammer Europe's stock markets


economy

Emerging market jitters hammer Europe's stock markets

Financial market turbulence continues, as it appeared that aggressive interest rate hikes by Turkey and South Africa would not be enough to stop a flight of foreign cash from emerging market nations.

Russia’s ruble dropped to a record low against a basket of currencies – losing more than one percent against the euro and the dollar.

The Hungarian forint weakened to a two-year low against the euro, as Hungary’s central bank Governor Gyorgy Matolcsy said that low inflation there means there is still room to cut interest rates.

Rumour about delays of government bond repayments – later denied by Hungary’s debt agency AKK – added to the nervousness.

The South African rand dipped 1.6 percent even after the country’s central bank raised interest rates for the first time in almost six years .. bringing its benchmark rate to 5.5 percent from 5.0 percent.

European shares fell to six-week lows.

Investors are concerned about the effect a further reduction of US monetary stimulus would have on emerging economies.

And those countries are also key revenue sources for Europe’s carmakers, fund managers and other companies.

The EuroSTOXX 50 index finished the day 0.9 percent down. The firms in that index make around a third of their sales in emerging markets.

Underscoring the risks for European companies, Fiat said its results were hit by a slowdown in Latin America. Its shares lost 4.1 percent.

As the stock markets took a hammering, gold rose and the dollar weakened against the yen and Swiss franc.

Every story can be told in many ways: see the perspectives from Euronews journalists in our other language teams.

Next Article

economy

Moldova's winemakers look west after Russian import ban