Market update: Equities stumble on fears of a near end to Fed stimulus – 30.05.2013

Source: Henderson Global Investors

US stocks fell on Wednesday (Dow Jones and S&P 500 both down 0.7%) with high yielding stocks in the more defensive sectors of consumer staples, healthcare, telecommunications and utilities bearing the brunt. Confusion and uncertainty over how soon the central bank would start unwinding its $85bn-a-month bond buying programme is creating volatile conditions in the markets.

Asian stocks have also fallen in overnight trading following the previous day’s poor performances in Europe and the US. The most dramatic drop has been in Tokyo once again with the Nikkei falling 5.2%. The slide in the index came as the yen began to strengthen, which sent a signal for heavy profit taking. Exporters and autos in particular were hurt the most. Equities are little changed in Europe this morning; although the FTSE Eurofirst 300 opened with a fall of 0.2%, at the time of writing the index was up by the same amount. The FTSE 100 was also up 0.2%. The cautious mood has helped government bonds. The yield on the 10-year benchmark US Treasury is down 1 basis point having reached 13-month highs on Wednesday, while the demand for less risky assets has seen German bund futures recover some ground too.