Australian shares are set to drop as Wall Street lost more than 1 per cent and traders turned to bonds, gold and safe haven debt.
US stocks slumped more than 1 per cent on Thursday, with investors scurrying to the safety of bonds and gold. Financial and technology stocks led declines, down 1.4 per cent and 1.7 per cent, respectively.P 500 consumer staples sector outperformed, helped by a 2.2 per cent jump in Walmart after it posted record holiday sales.
“You’ve got inflation that seems to be widespread, a Federal Reserve policy change looms on the horizon, and then there are ongoing tensions with Russia and Ukraine.” Banking stocks slipped 1.3 per cent, tracking weakness in British two-year government bond yields which fell sharply for a second straight day.Advertisement
The investment giant had an overweight call on the securities for most of last year when inflows to the nation’s bonds hit a record high. Benchmark European gas futures jumped as much as 8.9 per cent before closing at 74.914 euros a megawatt-hour. The UK equivalent contract increased 7.6 per cent. Month-ahead German power rose as much as 5.2 per cent.