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Market Update

Emerging Markets in Focus with Ukraine, Thailand Violence

Author: Nichole Harper
Last Update: 11:03 AM ET February 19 2014

11:00 AM New York – Emerging markets were in focus after protests turned violent in Ukraine, Thailand, Venezuela and Egypt. The U.S. housing starts dropped to annual rate of 888,000 in January and the permits demand declined for the third month in a row. Producer prices rose 0.2%.

Stocks reversed earlier losses and market indexes turned positive after thirty minutes of trading.

S&P 500 index increased 0.3% to 1,846.13 and the Nasdaq Composite Index decreased 0.1% to 4,268.63.

U.S. housing started dropped to 888,000 in January from the revised December rate of 1.05 million, the Commerce Department said today.

The decline in housing start rates was the largest since February 2011 and the data was weak for the third month in a row. Difficult weather conditions played a role in the weak starts but underlying data also suggested weakness.

International worries dominated trading sentiment and the dollar edged higher against, euro, Russian ruble, Polish zloty and Hungarian forint.

Ukraine Protest Turns Violent

Three month old protest in Kiev, Ukraine turned violent after radical demonstrators and police forces clashed in the Independence Square. The authorities said at least 25 people were killed including six police officers.

Ukraine government’s June 2014 bond yield soared 7.9 percentage point to 30.81% as the nation struggles to sell more debt and foreign investors abstain from bond auctions.

The benchmark stock index declined 2.5% following the 4% loss in previous session. The hryvnia fell 1% to 8.91 against one dollar.

Russian government pledged to buy $2 billion of bonds from the Ukraine’s government to support the financial system.

Thailand market index declined 0.5% after clashes between police and protesters in Bangkok killed five people. Thai baht dropped the most in two days in the last two months.

European Markets

Market indexes in Europe traded mixed after violence in Ukraine perked up and Germany joined Poland in placing pressure on Ukrainian government.

German bond auction today attracted 4.3 billion euros for its 10-year bund auction, missing the upper end of the target of 5 billion euros.

U.K. jobless rate in the fourth quarter to December increased to 7.2% from 7.1% in the previous quarter, the Office for National Statistics said today.

In London trading, FTSE 100 index fell 0.3% or 17.82 to 6,778.61 and in Frankfurt the DAX index slid 0.1% or 8.78 to 9,651.

In Paris, CAC 40 index rose 0.1% or 3.15 to 4,333.86.

U.S. Stocks in Review

Signet Jewelers Ltd (SIG) gained 16% to $92.20 after the parent of Kay Jewelers agreed to acquire Zale Corp for $21 a share in cash, valuing the company at $690 million.

The offer for Zale represents 41% premium to Zale’s share closing price of $14.91 on the New York Stock Exchange.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc